Key Points
- Silver prices increased by more than 100% in 2025, outperforming gold’s 60% gain. A supply squeeze and high industrial demand are fueling the rally.
- Global demand for silver has exceeded mine production for five consecutive years.
- Silver is used in solar panels, EVs, and other key technologies.
- Speculation about U.S. tariffs led traders to hoard the metal, exacerbating the shortage.
While gold has had an amazing year, silver has been the real star of the show. Thanks to President Trump’s unpredictable trade policies and growing concerns about the economy, investors have rushed into safe-haven assets. This sent gold up about 60% in 2025, but silver has done even better. The price of silver has more than doubled, jumping over 100% since the beginning of the year as a massive supply shortage collides with surging demand.
Unlike gold, silver has a dual identity. It is a precious metal used to store wealth, but it is also a vital industrial component. Factories use silver in everything from solar panels and electric car batteries to medical devices. The problem is, there simply isn’t enough of it to go around.
For the past five years, global demand has exceeded the amount that mines can produce. Now, with inventories at a record low, many industries are at risk of a major supply disruption.
The silver market is also much smaller and more volatile than the gold market. The value of all the silver stored in London is just a tiny fraction of the gold held there. While central banks can lend out gold to calm the market during a crisis, there is no such backup for silver. This means that when a supply squeeze happens, it can hit hard and fast.
That is exactly what happened this year. In October, as India prepared for its festive season, the market suddenly seized up. The cost of borrowing silver skyrocketed to a record high, and prices jumped. This was exacerbated by speculation that the U.S. might impose new tariffs on the metal, prompting traders to hoard silver in New York warehouses.
This perfect storm of low supply, high industrial demand, and nervous investors has pushed silver prices to levels few people expected. While it is a favorable time to be a seller, sustained high prices could eventually harm manufacturers that rely on the metal for their products.
