We will discuss an oversimplification of the sudden rise of in the silver price.
Silver has almost gone up by 270% in a year in 2025 (at the time of writing) – that’s 2x than gold.
Historically, Gold & Silver has been speculative or hedge against the currencies of the world’s asset.
Or a better description of it – “store of value” assets.
But Silver is changing its usual character, again.
In 2025, Silver has appreciated more than Gold – that’s surprising and interesting. We will talk about this later but let’s first discuss the price rise.
Silver Deficit
2025 marks the fifth consecutive year of global supply deficits – i.e the world consumed more silver than it mined.
Deficit comes down to less supply and more demand; let’s address it.
Demand:
New tech needs more Silver.
Samsung, Tesla, China – all of them are buying Silver.
Solar:
The shift from PERC cells to TOPCon (Tunnel Oxide Passivated Contact) cells requires 50-80% more silver per watt.
Solar demand alone now consumes nearly 20% of all silver mined.
AI:
AI-grade servers use 2-3x more silver than traditional cloud servers for interconnects and soldering.
EVs:
A full battery electric vehicle (BEV), is estimated to use 25–50 grams of silver, roughly 60-80% more silver than an ICE car on average.
Governments and Geopolitics:
In 2025, the U.S. designated silver a “critical mineral,” triggering strategic stockpiling and speculation on future export controls.
While Russia (2024–2025) became the first major central bank in decades to announce silver purchases for state reserves, joining institutional interest from entities like Saudi Arabia.
Supply
Now on the supply side, you can either mine more, recycle, or produce in a lab.
Almost similar or declining Output:
Mine production is projected to decline at a CAGR of -0.9% through 2030, reaching approximately 900 Moz/year due to the depletion of mature deposits. (Moz=Million ounces)
Even if the world finds more silver & decides to ramp up mining, it will take time and capital.
Recycle:
Recycling silver is not economically or operationally lucrative.
The Lab-Made Myth:
While atomic transmutation is theoretically possible via particle accelerators, it remains commercially absurd, costing millions of dollars for trillionths of an ounce.
For investment purposes, silver cannot be synthetically created.
Silver is changing, again.
Gold has always been the outperforming asset, but silver did a thing this year.
The Gold-Silver Ratio compressed sharply from 87:1 in January 2025 to 57:1 by late December as silver outpaced gold.
A ratio below 60:1 typically signals that the market is beginning to price in extreme industrial scarcity.
Caution:
- Will the demand from the industries sustain for long to keep it growing at a good rate?
- The first time silver price behaved as a utility rather than just a metal was between 1930-40s around the world wars. Then it shot up in 1970-80s, famous for hunt brothers. Then in 2000s and now. Most of the price rise has been utility rather than speculation. But every time silver went up, it slowed down for a long period of time.
I wrote this just for my curiosty, this is not financial advise. Do your own research.
