Silver was labeled as the commodity of the year in 2025 following surges in its prices that even reached an all-time peak and even outperformed gold in terms of percentage increase. The craze behind this precious metal was characterized by increased purchases by investors and institutional holders and higher trading volume by market speculators.
The Factors that Drove the Prices of Silver Upward: Why Silver Soared in 2025
Silver prices surged in 2025 as booming industrial demand collided with chronic supply constraints. These hurled further the metal from a traditional store of value into a strategic material at the center of the global energy transition and high-tech manufacturing boom.
Background
Note that silver is a dual-nature commodity. It is considered a safe-haven asset like gold and other precious metals, and a critical industrial material like iron and nickel. It is worth underscoring the fact that the value of silver tends to be consistent while traditional instruments and assets, such as stocks, bonds, and fiat currencies, become unstable.
One of the reasons behind the stability of silver is that it has intrinsic value. These characteristics come from the fact that it is a finite resource that needs to be mined. It cannot be printed out of thin air by a government, nor can it be issued by a corporation. Furthermore, because it requires substantial resources to be mined, its supply is limited.
Silver also has industrial uses. Note that the United States government, under the second Trump administration, added it for the first time to its List of Critical Minerals in November 2025. It is a component of computer hardware and solar photovoltaics, and it is vital in military-grade electronic communication equipment and systems.
Nevertheless, considering its status as a dual-nature commodity, and in addition to massive supply squeeze and geopolitical maneuvers stemming from the expansion of industrial applications, silver was one of the main headliners in the 2025 financial news cycle. Its price surged by more than 150 percent and briefly crossed the USD 80 per ounce mark.
Factors
Gold also saw its prices reach historic highs in 2025. It surged roughly 70 percent to reach an all-time high of more than USD 4500 per ounce. This was driven by a different set of factors that revolved around monetary instability and sovereign strategy. On the other hand, the surge in the prices of silver was industry-driven. Below are the factors:
• 5-Year Deficit Due to Increasing Industrial Demand
2025 marked the fifth consecutive year in which the world, especially by various industries and sectors, used more silver than it mined. Above-ground stockpiles in London and New York have hit their lowest levels in decades.
The industrial use of silver, especially in solar photovoltaics, electric vehicles, data centers, and artificial intelligence hardware, has expanded. Over 50 to 60 percent of demand now comes from the aggregate of industrial applications.
Moreover, on top of green energy expansion and artificial intelligence revolution, the inclusion of silver on the U.S. critical minerals list, which signals its importance for national security, has attracted massive institutional investment.
There are challenges in mining silver. Most of it is a by-product of other metal mining. The production cannot quickly expand even as demand increases and prices rise. This creates a situation characterized by persistent supply deficits.
• Speculations and Expectations in the Financial Markets
There were expectations that the U.S. Federal Reserve would cut interest rates in 2025. This is also expected to occur in 2026. A lower interest rate weakens the value of the U.S. dollar and enhances the appeal of non-yielding assets like silver.
Both silver and gold also benefited from perceived geopolitical risks, persistent tensions in international trade, and fears of inflation and currency debasement. But the industrial relevance of silver has added extra upward pressure.
Hence, considering the macroeconomic backdrop, the demand for silver among investors and traders has increased. Silver-backed exchange-traded funds or ETFs, along with other investment vehicles, also saw significant inflows in 2025.
Both retail and institutional investors and traders essentially looked for alternative assets and instruments to diversify their investment holdings, hedge against inflation, and increase their exposure to momentum in precious metals.
• Late-2025 Export Licensing Restriction by China
China handles about 65 percent of the refined silver supply of the world. It also controls over 80 percent of the silver power market used in solar panels. The country has positioned itself as a primary refiner and fabricator as part of its strategy.
However, in December 2025, it announced that it is planning to implement silver export controls starting in January 2026. This will involve stricter export licensing and mark how silver has become a strategic resource under state control.
The new policy has effectively wiped out small-sized and medium-sized silver exporters because securing an export license will now require an annual production capacity of 80 tons and a verified credit line of more than USD 30 million.
Nevertheless, following the announcement, fears of an imminent global supply bottleneck have emerged. This has prompted industries to secure the physical metal before the gates closed. Thus, resulting in immediate late-2025 price surges.
FURTHER READINGS AND REFERENCES
- Cattaneo, V., Mast, J., Hackenhaar, I., Nardone, S., Scheerlinck, S., Mertens, J., and Dewulf, J. 2026. “Forecasting Silver Demand and Supply by 2030: Impact of Silver-Intensive Photovoltaic Cells and Sectoral Competition.” Resources, Conservation and Recycling. 224: 108562. DOI: 10.1016/j.resconrec.2025.108562
- Garcia, C. 30 December 2025, “Opinion: China Launches Its Silver Weapon on Jan 1. What that Means for Investors and Prices.” MarketWatch. Available online
- Hoskins, P. 31 December 2025. “Gold and Silver See Rollercoaster End to Blockbuster Year.” BBC. Available online
- The Silver Institute. 2025. Silver Supply and Demand. The Silver Institute. Available online