Silver is outperforming gold in 2025, and it’s all because demand has blown past what miners can dig up, while electronics, electric vehicles, and solar companies are all grabbing for the same shrinking pile of metal.
As of early December, silver has doubled in price year-to-date, while gold surged by 60% in comparison.
Both metals are having the time of their lives though, as investors are steadily ducking out of fiat and into hard assets. But it’s silver that’s flashing red on the supply side, and it’s not built to handle this kind of squeeze.
Inventories are scraping the bottom. Supply isn’t keeping up. The risk now is broader: companies across sectors could face shortages if the current pace holds. The market is already showing signs of stress, and nobody’s stepping in to bail it out. There’s no silver equivalent of central banks lending metal into the system like they do with gold.
When liquidity dries up here, it just… dries up.
Industrial Demand Drives Silver's Value
Silver moves electricity better than almost anything on earth, which is why it’s built into circuit boards, switches, batteries, and charging stations.
But with margins already thin, high silver costs make it harder to stay profitable. Jewelry demand for silver is still strong, especially in China and India, where silver is passed down as a family asset.
The three biggest silver producers are Mexico, Peru, and China, who right now are dealing with everything from regulatory delays to environmental crackdowns.
ETF Flows and Market Sentiment
According to data from LSEG, the global total silver stash is currently under $50 billion. For comparison, gold sits at around $1.2 trillion, with a huge chunk of that in central bank vaults (especially the Bank of England) where it can be lent into markets when things get tight.
That system doesn’t exist for silver, so it’s every trader for themselves. Still, silver is cheap per ounce compared to gold too, so it is so much easier to buy for retail investors, though also riskier. But for those guys, this is a non-issue.
Meanwhile, physical silver-backed ETFs picked up 15.7 million ounces in November alone. Holdings have climbed in 9 of the last 11 months. These are active bets on supply staying tight and prices staying hot. But it’s not just ETFs. The options market is on fire too.
Jonathan Krinsky, chief markets technician at BTIG, pointed out that the iShares Silver Trust (SLV), which tracks the metal’s performance, posted three straight daily gains of 2.5% or more in the past week. “That’s only happened five other times in the ETF’s history (back to ’06). Four of the five occurred either at, or right before, a major peak for SLV,” he said.
Silver skew (a measure of call-option demand over puts) jumped 8 points to hit 10 percentage points in two weeks, which is the highest since March 2022 and also means that betting on an upside just got a lot more expensive. Wonder how that’ll play out.