Silver hit record highs in 2025 and still has further to run

Silver, known as the ‘Devil’s metal’ due to its volatility, has surged to record highs this year and experts believe it still has room to grow despite supply constraints.

The rise in silver prices has mirrored that of gold, which has also seen a significant rally, surpassing $4,000 per ounce this year.

Although silver prices hit a peak of $54.47 per troy ounce in mid-October, representing a 71% increase year-on-year, they have slightly retraced from those levels but are now on the rise again, despite limited supply.

“Some silver had to be transported by air instead of by sea to meet delivery demands,” noted Paul Syms, head of EMEA ETF Fixed Income and commodity product management at Invesco, in an interview with CNBC.

“While there was a spike followed by a slight decline in prices, the long-term outlook suggests that silver could maintain high prices and potentially continue to increase in the coming months,” he added.

October marked only the third instance in the past 50 years where silver prices reached their peak. Previous high points include January 1980, when the Hunt brothers attempted to corner the silver market, and 2011, following the U.S. debt ceiling crisis when silver and gold were seen as safe haven assets.

“Silver represents only a fraction of the gold market, and the recent short squeeze caught many investors off guard,” said Syms.

Unlike previous investment trends, the surge in silver prices in 2025 was driven by a combination of low supply, high demand from India, and industrial requirements.

“Following Liberation Day, gold prices surged while silver saw a slight dip. This led to the gold-silver ratio exceeding 100,” explained Syms, referring to the ratio that indicates how many ounces of silver are needed to purchase one ounce of gold.

A low ratio suggests that gold is relatively inexpensive, while a high ratio signals that silver is undervalued and likely to appreciate. In April, the ratio reached a historic high.

“Risk managers in financial and industrial sectors were reluctant to release any metal from the country for fear of it returning at a significantly higher price,” said Rhona O’Connell, head of market analysis EMEA and Asia at Stone X.

As the Autumn season arrived, silver experienced peak demand, particularly in India as the monsoon and harvest seasons concluded.

“Farmers in India prefer investing in gold and silver over traditional banking options, especially after a successful harvest,” O’Connell remarked.

India is the largest consumer of silver globally, utilizing around 4,000 metric tons annually for jewelry, utensils, and ornaments.

The surge in silver demand coincided with Diwali, a five-day ‘Festival of Lights’ celebrating prosperity and India’s largest public holiday.

On October 17, the price of silver in India soared to a record high of 170,415 rupees per kilogram, marking an 85% increase since the beginning of the year.

However, 80% of India’s silver supply is imported, with the UAE and China emerging as key supporters of this demand, although the U.K. has historically been India’s primary silver supplier.

Despite this, London’s silver reserves have been depleting rapidly in recent years. In June 2022, the London Bullion Market Association held 31,023 metric tons of silver, a figure that dropped to 22,126 metric tons by March 2025 — the lowest level in years.

“The situation in the vaults, although not immediately visible to everyone, had reached a critical point where there was virtually no silver left in London,” O’Connell explained.

In October, traders faced significantly higher borrowing costs, or lease rates, to close their positions due to the supply squeeze.

“At one point, overnight borrowing costs soared to 200% on an annualized basis, causing considerable stress for many individuals,” O’Connell stated.

Supply remains a persistent issue for silver, similar to other precious and rare metals. The 2025 World Silver Survey by the Silver Institute indicates a decline in mine production over the past decade, particularly in Central and South America.

“In the past year, we’ve observed a shift from surplus to deficit due to factors like the electrification of vehicles, artificial intelligence, and solar power,” O’Connell highlighted.

“Currently, a standard electric vehicle contains about 25 grams of silver, with larger EVs utilizing up to 50 grams in their components,” Syms explained.

“If we transition to solid-state silver batteries, each electric vehicle could require a kilo or more of silver,” he added.

Given silver’s superior thermal and electrical conductivity compared to other metals, coupled with the rising demand for EVs, AI, and renewable energy sources, the metal is poised to maintain its value.

“Silver bridges the gap between precious and industrial metals, and with technological advancements in batteries and solar panels, it offers numerous applications in an increasingly electrified world,” Syms concluded.