Silver’s surge to fresh record highs in 2025 has outpaced even the spectacular run in gold, transforming the so-called “Devil’s metal” into one of the strongest-performing assets of the year. With prices up more than 70% year-to-date, investors are now asking whether the rally is sustainable—or if silver is poised for an even sharper climb as structural shortages meet accelerating industrial demand.

A Market Squeezed by Supply Tightness

While gold has risen on geopolitical tensions and expectations of looser monetary policy, silver’s rally has been driven by something far more fundamental: tightening supply. Global mine production has been declining for a decade, particularly in major producer regions such as Central and South America. Mine closures, aging deposits, rising extraction costs, and infrastructure challenges have pushed output lower at a moment when demand is broadening.

“Silver is only about a tenth the size of the gold market,” noted independent market strategist Philip Syms. “That short squeeze obviously caught a few investors by surprise.”

Silver’s smaller market size makes it much more sensitive to rapid shifts in buying activity. When India ramped up imports earlier this year and Western refiners held onto stock due to concerns over tariff-related price distortions, the squeeze intensified. Many US-based risk managers were unwilling to release metal into the market, fearing premiums could reappear if tariffs were imposed, a dynamic that added further tension to physical supply.

A Historic Gold–Silver Ratio Signals Repricing Ahead

The gold–silver ratio—how many ounces of silver equal one ounce of gold—spiked above 100 earlier this year, reaching historic extremes. Such levels traditionally signal an undervalued silver market.

“After Liberation Day, gold spiked but silver went the other way,” Syms said. “That ratio spiking above 100 signaled a massive mispricing.”

Analysts argue that the rebalancing of this ratio alone has been a powerful catalyst for silver’s sharp move higher. But it also reflects a deeper shift in investor psychology: silver is no longer being viewed solely as a precious metal, but increasingly as a strategic industrial resource.

The Industrial Renaissance Driving Silver’s Future

Silver’s long-term investment case hinges heavily on its industrial applications. It is the most conductive metal on earth—both thermally and electrically—making it indispensable for next-generation technologies.

Electric vehicles currently require between 25 and 50 grams of silver each, according to market data. But that number could rise dramatically.

“If we move into solid-state silver batteries, each electric vehicle might require a kilo or more,” Syms warned.

Meanwhile, photovoltaic installations for solar technology remain one of the fastest-growing sources of global silver demand. AI data centers, renewable energy grids, and advanced electronics are adding another layer of pressure on already constrained supply.

Rhona O’Connell of StoneX summarized the shift succinctly: “Silver crosses over that bridge between precious and industrial metals.” As global electrification accelerates, that crossover is becoming the foundation of a structural bull market.

Looking Ahead

With supply declining, industrial applications expanding, and investor interest rising, the factors behind silver’s historic rally appear durable. If the gold-silver ratio continues normalizing and new battery technologies materialize, the metal may have significantly more room to run. Market watchers will monitor whether upcoming tariffs, energy policies, and mining investments help alleviate shortages—or intensify the imbalance.