Silver has surged more than 33% year-to-date in 2025, hitting levels not seen since 2011. Spot prices are now above $37/oz, according to LBMA data, outperforming gold and many major equity benchmarks. For mining professionals and investors alike, the rally is raising a key question: does silver’s industrial backbone make it a stronger long-term bet than gold?
Silver Outpaces Gold in 2025 Performance
Gold made headlines in 2024 with record highs, but silver has outshone its rival this year. According to Bloomberg Metals data, silver’s 33% rally has eclipsed gold’s 19% gain so far in 2025. Analysts attribute this divergence to the dual nature of silver—part precious, part industrial.
“Silver is over 50% industrial today, with high-end electronics and photovoltaics driving demand,” said Robert Crayfourd, portfolio manager of Golden Prospect Precious Metals Trust, in comments to MoneyWeek. That industrial demand has proved resilient, even as investors turned defensive on gold during bouts of market stress.
Supply Crunch Deepens
Figures from The Silver Institute highlight a widening supply deficit. Annual demand grew from 993 million ounces in 2016 to 1.16 billion ounces in 2024, while mine supply slipped from 1.06 billion to 1.02 billion ounces. The result is a persistent shortfall that miners have struggled to offset despite higher prices.
Industrial silver use hit 680.5 million ounces in 2024, with solar PV installations alone consuming nearly 30% of that volume. The Institute projects another 9% rise in 2025, as new solar capacity expands in the U.S., China, and India.
For miners, this represents a structural demand tailwind, but also a challenge. Many high-grade silver deposits are depleting, and new projects face permitting bottlenecks. Skillings recently reported on how regulatory timelines in Latin America are constraining new silver supply.
Investor Appetite: “Gold on Crack”
Silver’s volatility remains its defining feature. “You can think of silver as gold on crack—more irrational, more volatile, more dangerous, but also more rewarding,” said Adrian Ash, head of research at BullionVault.
That volatility has earned silver the nickname “the devil’s metal” among futures traders. While physical bullion investors may escape some of the sharpest moves, silver has historically overshot both on the way up and the way down.
Still, survey data suggests optimism. In July, BullionVault polled over 1,000 clients, with respondents forecasting $41.18/oz by year-end 2025—a further 42% upside from January levels.
The Gold-Silver Ratio
The gold-silver ratio—one of the oldest financial yardsticks—currently sits near 87:1, according to LBMA figures. Historically, levels above 80 suggested silver was undervalued.
“Repeated deficits in silver supply versus soaring demand should support a rebalancing of this ratio,” Ash said. For miners, a narrowing ratio could increase capital flows into silver-focused exploration and mid-tier producers, potentially improving financing conditions after several lean years.
Routes to Silver Exposure
Investors have multiple ways to play the silver trade:
- Physical bullion: Coins and bars remain popular, though VAT and dealer spreads reduce returns.
- Exchange-traded commodities (ETCs): Products like iShares Physical Silver ETC (LON: ISLN) track spot prices directly.
- Mining equities: Shares in primary silver miners or ETFs such as Global X Silver Miners (LON: SILV) offer leveraged exposure but add company-specific risks.
Golden Prospect Precious Metals Trust, for example, allocates 7.9% of its portfolio to silver miners, compared to 88.5% gold.
For professional investors, the choice often depends on whether silver is seen as a safe-haven hedge or an industrial growth proxy.
Skillings Analysis
- Industrial demand is now silver’s main price engine. Unlike gold, where central bank demand dominates, silver’s fortunes rise and fall with solar, EV, and electronics cycles.
- Volatility should not be underestimated. Silver rallies can deliver windfall gains for miners, but also expose investors to sharp drawdowns when speculative froth unwinds.
- Mining supply remains the structural bottleneck. Without new investment in high-grade projects, deficits are likely to deepen, supporting prices over the medium term.
Outlook: Can the Rally Last?
Heading into Q4 2025, silver’s trajectory hinges on two forces: industrial growth and global trade risks. If renewable energy and AI hardware continue to expand, demand could keep silver well bid. But geopolitical shocks—such as renewed tariffs or energy policy reversals—could weigh on consumption.
For miners, this environment underscores the strategic value of silver. With deficits widening and prices at 14-year highs, operators positioned in high-demand regions such as Mexico, Peru, and Canada could be set for outsized gains—if they can bring new supply online.
