Gold stole the spotlight this year, but silver outperformed gold in 2025. While gold did reach new record highs, it is up only by 67% compared to silver, which more than doubled in 2025.
On January 2, silver was quoted at $29, and as of December 22, it traded at $69, a 137% increase.
The sheer force that silver exhibited in 2025 is evident when, for the first time since 2011, silver crossed the $40 mark.
The big move in silver began in the first week of June. Despite minor corrections in October and November, silver then managed to breach the decades-old resistance level at around $50.
What’s Behind Silver’s 2025 Rally
How silver performs in 2026 remains to be seen, but the factors that led to the metal’s bull run could provide some cues.
The geopolitical and economic uncertainties initially led to an increase in demand for gold. Thereafter, silver followed, as history shows that the two precious metals rise in tandem.
The ratio of gold to silver price also played a role in the Silver’s 2025 bull run. Gold has been rising consistently since 2022 and by January 2025, the ratio crossed 100, much above the long term average of 70.
A ratio of over 100 made silver look underpriced compared to gold. This attracted investors and traders, pushing up demand and driving prices higher for silver. The ratio has fallen to under 65 as of December 22.
Reasons Behind the 2025 Bull Run
Many analysts are of the view that the price of silver was kept suppressed for many decades. What led to the spike in prices was supply shocks that the silver market experienced in 2025. A squeeze in supply is indicated by near-record low inventories and increased investor demand, which raises the risk of supply shortages affecting various industries.
The ongoing tariff concerns and strong silver demand in India and China are supporting prices, while delivery issues between London and New York are causing a silver squeeze, leading to increased prices.
For five years now, global silver demand has exceeded mining output. The cost of mining silver has gone up, creating a supply crunch leading to a spike in prices. The big demand for silver emerges in the industrial sector, where it is used in solar panels, medical devices, circuit boards and switches, electric vehicles and batteries.
But, not just industrial demand, silver, like gold, is a favoured metal for jewelry and coins, with China and India being the leading consumers due to their industrial capacities, large populations, and the cultural significance of silver jewelry as a valued inheritance.
During October’s Indian festive season, silver demand surged, resulting in record borrowing costs and a significant price increase.
In November, the precious metal Silver was included in the U.S. Geological Survey’s list of critical minerals, which is anticipated to boost interest in Silver.
Further, investment in silver-backed exchange-traded funds (ETFs) is increasing, leading to a notable reduction in available silver stocks in London, the main spot trading hub, due to significant inflows into these funds backed by physical bullion.
Silver ETF investment saw net inflows of 95 million ounces in the first half of 2025, surpassing the total for all of 2024, driven by bullish price expectations. With rising silver prices, the value of these holdings reached over US$40 billion by the end of June, marking a new all-time high, according to the Silver Institute.
Silver Institute, in a report, summed up the top reasons behind the dramatic year for the silver market. From an unprecedented liquidity squeeze resulting in record-high lease rates to record volumes being delivered into CME vaults as a reflection of tariff concerns in the US to silver being officially designated as a critical mineral by the US government, these three factors played a big role.
How to Play the Silver Game in 2026
The fear-of-missing-out (FOMO) could soon take over the retail investors. After a record run in 2026, many retail investors would now want to jump on the bandwagon.
Investments in silver serve a dual purpose: they benefit from rising prices due to industrial demand during economic growth and are regarded as a haven during recessions.
The general factors influencing silver prices in 2026 remain the same as they were in 2025. From the Trump administration’s tariff policies, potential US Federal Reserve rate cuts, and geopolitical uncertainties to supply constraints amidst rising demand, expect them to support silver prices in 2026.
Silver prices have shot up considerably and, like any other asset, are prone to dips and corrections. Therefore, have a plan in place and consider taking an exposure of up to 3-5% of one’s portfolio with a long-term goal in focus.
It remains to be seen if silver, the close cousin of gold, will live up to the notion that it is the new gold in 2026. If it happens, it will be another blockbuster year for silver.
Disclaimer: The purpose of this article is only to share data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.