Missed Gold's Surge? Silver's Ready to Shine

Gold has surged past the $3,000 mark, breaking new all-time highs almost daily and capturing investors' attention. In contrast, silver, another key precious metal, has been largely ignored. However, silver's performance over the past two years has been no less impressive than gold's.

Silver is a hidden, precious gem that should be considered by investors looking for an opportunity to play the gold and silver bull markets, said Peter Spina, founder and president of GoldSeek.com and SilverSeek.com.

Silver prices have been dragged higher by gold's climb, as reflected in the gold-to-silver ratio, which continues to trade above 90 ounces of silver per 1 ounce of gold. According to Spina, this level is extreme from a monetary perspective, but silver tends to lag gold in major bull markets.

Trevor Yates, senior investment analyst at Global X, highlights how inexpensive silver is compared to gold. Historically, since the late 1980s, the average gold-to-silver ratio has been around 70:1, according to a Sprott report from January. The current higher ratio suggests that silver is undervalued relative to gold.

Is Silver About to Catch Up?

Spina notes that silver often lags behind gold until market sentiment surges, prompting investors and speculators to flood into the small-cap silver market, driving up prices at a faster rate than gold. We may be approaching that moment, he says, adding that market fundamentals strongly favor a sharp and rapid silver price rally in the coming months.

Silver still has significant upside potential. According to the Silver Institute, the global silver market is expected to face a fifth consecutive year of supply deficits in 2025. This year, total global silver supply is projected to reach an 11-year high of 1.05 billion ounces, with mine production hitting a seven-year peak.

Yet, even at these levels, supply will still fall short of demand. While demand is expected to remain stable, it will reach 1.2 billion ounces, outpacing supply.

Investor Sentiment and the Role of ETFs

Despite silver's structural supply deficit over the years, Western ETF investors have consistently been selling, limiting price increases. However, Spina notes that ETF selling has now flipped to buying, indicating a rebound in silver investment demand, driven by both strong investment and industrial demand.

Silver is everywhere in modern life, Spina highlights, especially with rising green energy applications boosting long-term demand.

A report from the Silver Institute in January noted that macroeconomic and geopolitical risks have increased investor interest in silver as a safe-haven asset in early 2025.

Tariff Risks and Silver's Physical Market Surge

However, the report also warns that new Trump-era tariffs and their potential impact on global economic growth—particularly in China—could dampen investor enthusiasm for the entire industrial metals sector.

Despite these concerns, Spina has observed a notable trend in the U.S. precious metals market: significant imports of both gold and silver. People are scrambling to buy silver at pre-tariff prices, and once tariffs are imposed, silver prices will likely surge, he explains.

This rush to acquire untaxed physical silver is adding pressure to existing supply, he adds. Moreover, some short positions may be at risk of a short squeeze, which could trigger a dramatic silver price rally.

Silver Price Outlook: A Rally to $50, or Even $100?

If the market functions normally, without a major short squeeze, Spina sees silver rising above $40 per ounce in the coming months and surpassing $50 per ounce if supply tightens.

However, if silver supply constraints spark a rush to buy, he warns that silver prices could be driven dramatically higher, possibly surging to $75 or even $100 per ounce. A physical silver squeeze is building, he says.

The more likely scenario, however, is that silver ends the year trading between $40 and $50 per ounce.

Silver's Industrial Demand and Investment Opportunities

Global X's Yates remains bullish on silver, expecting the metal to benefit from a recovery in global industrial and manufacturing activity, as well as strong demand from the solar industry.

For investment opportunities, he favors silver miners over the physical metal itself, as miners provide leveraged exposure to rising commodity prices.