Silver has been experiencing an impressive surge in prices, rising about 75% this year as investors flock to safe-haven assets amid economic uncertainty and geopolitical tensions. This rally is not only marked by strong investment interest but also bolstered by a robust industrial demand and ongoing supply deficits.
On Monday, silver futures traded in New York rocketed 7%, reaching an all-time peak of approximately $52.63 per troy ounce, surpassing a record set over 40 years ago in 1980. Spot silver prices followed suit, also hitting a historic high above $52 per troy ounce after crossing the $50 mark for the first time since 1980 on October 9.
The increase in silver prices is reflective of a broader trend where traders have turned their attention to hard assets, including gold and silver, as reliable investments and hedges against risks such as inflation, tariffs, and government debt. With gold recently achieving an unprecedented milestone of $4,000 per troy ounce, silver is being viewed as a more affordable alternative safe haven. Michael DiRienzo, CEO of the Silver Institute, noted that concerns about the global economy drive investors toward hard assets like silver, highlighting its tendency to follow gold in upward momentum.
In addition to its safe-haven attributes, silver possesses several industrial applications, which contribute to its demand. It is integral in the manufacturing of solar panels, data centers, and smartphones, further solidifying its market position. Ewa Manthey, a commodities strategist at ING, predicted that the combination of silver’s industrial demand with its role as a safe haven could make 2025 a landmark year for the metal.
Supply issues add another layer to the rising prices. The silver market is currently experiencing its fifth consecutive year of structural supply deficits due to stagnant mining output failing to meet growing demand. Peter Grant, vice president and senior metals strategist at Zaner Metals, pointed out that the strong demand alongside these persistent supply challenges creates a scenario ripe for higher prices.
Additionally, other precious metals like platinum have also seen significant increases this year, with prices up approximately 80%, surpassing silver’s gains. This broad rise in precious metals, combined with Bitcoin’s appeal among Wall Street traders seeking to secure against a weakening dollar, reveals a substantial shift in investment strategies.
Investors looking to engage with silver have several options, including purchasing physical bars or coins or investing in silver-backed exchange-traded funds (ETFs). The iShares Silver Trust ETF has soared by roughly 68% this year, with inflows into silver ETFs reaching their highest levels since 2020. Maria Smirnova, chief investment officer at Sprott Asset Management, remarked on silver’s steady ascent and breakout potential, emphasizing the thinning supply and increased investor awareness.
This year’s performance sets a promising tone for silver as it benefits from renewed investor interest and fundamental shifts in the market. With its unique position as both a precious metal and a critical industrial component, the future appears bright for silver as it continues to break historic price records.