Silver is beginning to outshine gold. After nearly two years of steady gains, the metal has started to outperform its more celebrated counterpart significantly. It is a signal that the second phase of the commodity bull market might be taking shape.
Spot silver surged over 85% in 2025, climbing from under $30 per ounce to over $54 through October.
Spot silver vs spot gold, year-to-date, Source: TradingView
Kitco reported that, per consultancy firm Metal Focus, it is a combination of tight inventories, persistent investor flows, and a structural supply deficit driving the rally.
The research firm sees silver reaching $60 next year. It highlights that stocks in London remain depleted after a year of heavy withdrawals driven by Indian demand, ETF accumulation, and precautionary stockpiling in the United States.
Dual Purpose, Unitary Deficits
Silver's dual identity is also central to the story. It is both a traditional store of value and a critical industrial material—particularly in renewable energy technology. Its conductive properties remain unmatched for solar power generation.
Industrial demand rose to 689 million ounces in 2024, with photovoltaic (PV) applications accounting for 244 million ounces, up more than 150% from 2020. Solar capacity additions continue to rise globally, and the International Energy Agency expects 4,000 gigawatts of new installations from 2024 to 2030. That trajectory alone could lift silver demand by roughly 150 million ounces a year by decade's end.
Producers are attempting to reduce the amount of silver used in PV cells. Metals Focus notes widespread "thrifting" initiatives and substitution efforts in response to high prices, but the firm expects these adjustments to take years.
Meanwhile, the Silver Institute projects a fifth consecutive annual supply deficit of roughly 95 million ounces. Despite weak demand for jewelry and silverware, the deficit remains wide enough to support elevated prices.
The supply picture offers little relief. More than 70% of mined silver comes as a byproduct of copper, lead, zinc, or gold production. That dynamic limits producers' ability to respond quickly to higher prices. Metals Focus also warns that several mines are scheduled to close by 2030, potentially further tightening output.
Fractal Continuation Patterns
Although silver's multi-decade price formed arguably the largest cup-and-handle patterns in history, short-term patterns are equally interesting.
Silver's short-term cup-and-handle continuation pattern, Source: TradingView
After printing an all-time high of $54.49, silver's pullback and a subsequent rally have also formed a cup-and-a-handle pattern. Per traditional technical analysis, a price target upon the break of the rim equals the vertical height of the "cup."
Thus, technicals suggest silver may not yet have said its last word in 2025.
Price Watch: iShares Silver Trust (NYSE:SLV) is up 83.82% year-to-date.
Photo via Shutterstock
