What happens to the price of silver in 2025?
Silver has experienced a remarkable bull market, with its price doubling from around $30 (€24.54) per ounce at the beginning of the year to an all-time high of $64.65 per ounce on December 12.
The metal traded near $30 in January on COMEX, the commodities division of the New York Mercantile Exchange (NYMEX), and hovered between $37 and $40 throughout the summer before hitting a decisive high in September.
The momentum accelerated, with the strongest moves occurring in the last three months of the year.
The year-to-date gain of 110% represents a dramatic turnaround for the precious metal, long considered gold’s weakest cousin, which typically costs more than silver during bull markets.
Although some investors are warning of a possible short-term price correction, sentiment remains bullish on silver for next year.
Before 2025, silver spent most of the last decade between $15 and $25, with occasional spikes above $30 during investor euphoria. But it struggled to maintain upward momentum.
Even at previous peaks in 1980 and 2011, silver hovered near $49 an ounce, well below gold’s surge above $1,900.
However, gold has underperformed this year, rising 60% to about $4,340 an ounce, while the price of silver has more than doubled.
The breakout was partly fueled by a declining US dollar and expectations of a US Federal Reserve rate cut, making precious metals more attractive as safe-haven assets.
But broader factors fueled the rally further, including tightening global supply as production struggles to keep pace with demand.
What are the challenges facing silver production?
Latin America, which produces more than half the world’s silver, is facing declining production as mines age and reserves decline.
Mexico, responsible for 25% of the world’s supply, has seen double-digit declines in production in recent years.
One of the country’s largest mines, San Julián, in northern Chihuahua state, is nearing completion by 2027. It is one of mine operator Fresnillo’s largest operations. Its ore grades are falling and reserves are depleting.
Meanwhile, Peru, Bolivia and Chile, which together supply about a third of global silver, are struggling with declining ore grades that make extraction costlier and less efficient.
These countries also face political instability and strict mining regulations, which have discouraged new investment in their mining sectors.
Without new discoveries or supportive regulations, production from Latin America is expected to stagnate or decline by the end of the decade, according to analysts at London-based GlobalData.
Meanwhile, the industry association says the silver market is in structural loss for the fifth consecutive year The Silver Institute wrote last month,
Demand is expected to exceed supply this year by about 95 million ounces, the institute said.
Why is the demand for silver increasing?
Demand for silver is increasing not only because investors view it as a store of value, but also because it has become essential to modern technology and clean energy.
Its unique properties, particularly unmatched electrical and thermal conductivity, make silver indispensable in rapidly growing global industries.
For example, solar panels rely on silver paste to conduct electricity. As governments advance renewable energy targets, demand for the photovoltaic sector is set to grow rapidly.
Electric vehicles (EVs) require two-thirds more silver than combustion-engine automobiles. The metal is used in batteries, wiring and charging infrastructure, putting the metal in the future of green transportation.
Silver is now playing an increasingly important role in the digital economy. Artificial intelligence (AI) chips and data centers rely on silver for efficient circuitry, where speed and reliability are paramount.
The precious metal’s ability to handle heavy electrical loads ensures clean signals and stable performance at scale, while high thermal conductivity helps dissipate excessive heat generated by AI workloads.
While silver use in coins and bars is declining, other traditional uses such as in jewelery as well as electronics, medical devices and consumer goods remain strong.
The Silver Institute estimates that global industrial demand for silver is expected to continue to grow over the next five years.
Oxford Economics calculated this month that silver demand from the auto sector will grow 3.4% annually between now and 2031, and the precious metal will benefit from a projected 65% increase in U.S. data center buildout over the same period.
What was the historical role of silver as money?
For millennia, silver has been relied upon as a store of wealth and value. Ancient civilizations used it in trade because it was rare, durable, and easy to divide.
The importance of silver increased even more when European colonists discovered vast deposits in Latin America, helping it become the metal of daily transactions.
Spanish pieces of eight – silver coins worth eight reales, Spain’s old currency before the peseta and euro – became the world’s first global trade currency, circulating from the Americas to Asia and Europe.
In the 19th century, many countries, including the United States and the United Kingdom, pegged their currencies to both gold and silver. Britain’s pound sterling takes its name from the silver pound.
Silver lost its role as money in the 20th century when countries dropped their silver standards. The gold remained in central bank reserves, but the silver was put to industrial use.
It has retained its reputation as a hedge against inflation and financial instability, a legacy of its long history as everyday money.
Edited by: Uwe Hessler