Silver prices have seen a strong surge during the first half of 2025, surpassing the $35 per ounce mark and reaching their highest level in over 13 years, peaking at $36.08. This significant increase has been driven by several intertwined factors, most notably strong industrial demand and global supply shortages. Analysts have emphasized that silver now has solid fundamentals, making it capable of closing the performance gap it has had with gold.
One of the key indicators of silver’s improving performance is the decline in the gold-to-silver ratio to around 94, down from 105 in April. This reflects silver’s rising value relative to gold. According to experts like Nitesh Shah from WisdomTree, the market is experiencing a structural supply deficit in silver for the fifth consecutive year. This increases the likelihood of sustained price growth, especially considering that most silver is produced as a by-product during the mining of other metals, which makes ramping up production in response to higher prices more difficult.
Silver is considered a unique metal because it plays a dual role: it serves as a safe haven in times of economic uncertainty and is also heavily used in industry particularly in solar energy and electrical technologies. This robust industrial demand is a key driver behind the current price surge. According to the Silver Institute, more than half of global silver demand comes from industrial uses.
On the other hand, some believe the future of silver could be even brighter than it currently appears. Keith Neumeyer, CEO of First Majestic Silver, has reaffirmed his bold prediction that silver prices could reach $100, or even $130 in the long run. While this forecast may seem overly optimistic, Neumeyer has stood by his view for years, basing it on the limited global supply and growing demand amid rising global economic and political tensions including escalating trade wars led by former U.S. President Donald Trump.
In conclusion, the recent rise in silver prices does not appear to be just a temporary spike, but rather part of a long-term movement supported by structural factors in the market. With industrial demand continuing and supply remaining tight, silver may be on the brink of a new phase of strong performance that could surprise even the most cautious analysts.
