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Silver (SI=F) touched fresh record highs this week before easing on Wednesday as traders positioned ahead of a busy run of US economic data, showing that gold (GC=F) isn’t the only precious metal that shines.
Precious metals have rallied on expectations of lower US interest rates and a weaker dollar. Futures markets now assign an 88% chance of a Federal Reserve rate cut in December, according to CME’s FedWatch tool, following a run of cooler US data and increasingly dovish signals from policymakers.
Silver, often nicknamed the “Devil’s metal” because of its volatility, has also gained support due to concerns that the US could include the metal in future tariff measures, following its addition to the Geological Survey’s list of critical minerals last month. That shift has driven inflows into the US market.
At the time of writing, silver futures were trading at $58.85 per ounce after peaking at $59.65 on Monday, while spot price was trading at $58.40. Silver has risen 101% this year, supported in part by its addition to the US list of critical minerals.
Prices have risen over the past week as falling Treasury yields, a softer dollar and growing conviction over a near-term Fed cut revived appetite for precious metals. Silver has outperformed gold due to its higher sensitivity to easing financial conditions. Investor positioning has become more constructive, with increased exposure to metals showing strong momentum ahead of key risk events.
Industrial demand indicators have reinforced the move, with solar and electronics orders staying firm and exchange inventories remaining tight. Limited physical supply has heightened the impact of speculative flows, contributing to a short-term squeeze.
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The next catalysts for the market will be US inflation data, central bank communication and moves in Treasury yields, all of which could either extend the rally or prompt profit-taking.
London, the centre of global physical silver trading, typically holds hundreds of millions of ounces in vaults. Inventories have fallen sharply as concerns over potential US tariffs encouraged traders to shift holdings to the US. Strong demand for silver-backed ETFs has further absorbed available metal.
Interest in precious metals has risen in recent months as investors react to higher debt levels in major Western economies and concerns over currency debasement. Gold is up 60% this year, moving above $4,200. Silver, which usually tracks gold, remains more volatile due to its smaller market size and heightened sensitivity to moves in the dollar.
The gold to silver ratio has narrowed to about 73 ounces of silver per ounce of gold, from 89 at the end of August.
Neil Welsh, head of metals at Britannia Global Markets, said: “Silver remains volatile and constructive, buoyed by record ETF inflows and shrinking physical inventories, while industrial demand and rate expectations drive sharp moves. The metal is highly sensitive to dollar swings and Fed signals, offering upside on tightness but requiring close monitoring of speculative positioning.”
The metal’s comparatively low price continues to draw investors seeking more accessible safe haven assets, while its industrial uses in solar technology and components tied to artificial intelligence support structural demand.
Silver is supported by “a tight supply outlook, continued momentum buying and short covering following last Friday’s breakout above $54.50,” said Ole Hansen, head of commodity strategy at Saxo Bank. He added that overbought conditions posed a near term risk for silver bulls.
Nikos Tzabouras, senior market analyst at Tradu.com, said: “Silver is extending its record-breaking streak, outpacing gold with a rise of roughly 95% this year, buoyed by structural demand and its role in critical infrastructure. It is essential for semiconductors and the data centre buildout powering the AI boom, the defence industry amid rising military budgets, and solar panels, EVs and other clean energy applications.
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“However, the deficit is likely to narrow this year, which may limit further price gains. Global economic headwinds stemming from tariffs, risks to AI proliferation, and Trump’s scaling back of clean energy projects could weigh on silver consumption.”
AJ Bell investment director Russ Mould said: “Such concerns have already helped to drive gold to a new all-time high in 2025 and now silver has started to play catch up.
“The gold-to-silver ratio briefly crossed 100 earlier this year, only the third time it had done so since 1980. That suggested silver was cheap relative to gold (or at least that gold was expensive relative to silver), since the post-1979 average ratio is 66. Silver’s faster gains in the second half of 2025 have brought the ratio down to 78.”
Retail demand has surged. BullionVault reported that first-time buying is running at levels usually seen only during financial or economic crises.
“Gold and silver have reacted to the first year of Donald Trump’s return to the White House like it’s the banking crash or COVID pandemic,” said Adrian Ash, BullionVault’s director of research.
“Gold priced in British pounds has now set a new month-average record for 16 months in a row, an unprecedented stretch of new all-time highs more than twice as long as the seven months seen during the oil-and-inflation crisis of 1973.”
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Ash added: “While there’s every chance that the current fever in gold and silver prices will sweat itself out, it’s hard to see any cure for the long-term bull market in these hard money assets, not in the way that capping QE hit gold and silver in 2013 or the vaccine did five years ago.
“Given next year’s geopolitical outlook, plus Trump’s capture of the Federal Reserve, the underlying uptrend in bullion prices looks set to continue.”
BullionVault, used by 120,000 people worldwide and holding £6.1bn of gold, silver, platinum and palladium, said new demand has risen 121.7% over the past year.
Ash said: “The big difference between 2025 and this century’s previous surges in new precious metals demand is that Western investors didn’t own anywhere near as much bullion going into the financial crisis or Covid pandemic. So, this year’s rush has been offset by ongoing profit-taking among existing investors as prices jump ever higher.”
Silver averaged more than $50 per troy ounce in November, marking a third consecutive month-average record and the longest such run since 1979.
Ash said: “Unlike the precious metal surges of 2011 or 2020, there’s been no extreme stress in wider financial markets this year. On the contrary, global stock markets have also risen to new all-time highs.
“With fears growing of a 2026 crash in the AI bubble, it would be truly different this time if the appeal of rare, physical bullion doesn’t rise further should the equity boom turn into bust.”
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