Silver Shines Amid Industrial Demand and Supply Constraints
ilver has surged over 30% year-to-date, rising from $70 to over $90, outpacing gold, which gained more than 7% YTD from $4,340 to $4,670. After lagging behind gold for most of 2025, silver’s momentum picked up sharply in last November, highlighting a growing divergence in the pace of movement between the two metals.
Historically, gold is regarded as a safe-haven asset, attracting capital during economic uncertainty or geopolitical tensions. Silver, however, carries dual characteristics: it is both a monetary precious metal with safe-haven characteritic and a key industrial commodity. With its widespread applications in electronics, electric vehicles, and solar panels, industrial demand now become one of the primary factors influencing silver prices.
The gold-to-silver ratio, which measures how many ounces of silver are needed to buy one ounce of gold, spiked to 100:1 mid-2025, this extreme level drew attention from contrarian investors targeting silver as the so-called “poor man’s gold.” Following the January sharp rally, the ratio has since retreated to around 50:1. Historically, since 2000, the ratio has typically hovered between 65 and 80. Based on this, the adjustment ahead could take the form of a renewed acceleration in gold prices or a moderation in silver’s momentum. That said, whether the 50:1 level represents a new normal driven by structural shifts remains to be seen.
Looking ahead, two major industrial drivers are poised to support silver demand: the AI boom, which increases the need for high-performance computing chips, and the next-generation N-type solar panels, which consume 30–50% more silver per unit than traditional P-type panels. Supply constraints further reinforce silver’s upside: 2025 marks the fifth consecutive year of a supply deficit, with mining output limited by its status as a byproduct of other metals and recent export controls in China. Central banks in Russia, Saudi Arabia, and India are also increasing silver holdings, signaling long-term strategic interest.
While precious metals remain elevated, the three major U.S. stock indices are still hovering neear historic highs, suggesting the potential risk of a sharp short-term market corrections. Investors holding risk assets are therefore advised to maintain disciplined stop-loss and profit-taking strategies amid ongoing volatility, as conditions remain choppy and uncertain.
