Silver prices are up over 20% year-to-date. In the past five years, silver has surged over 98%. At about $36/oz, it is the least expensive of the major precious metals and generally considered to be undervalued due to consecutive years of supply shortages combined with steady industrial and investor demand.
While gold tends to thrive on economic uncertainty, silver prices rise amid flights to safety as well as more stable economic environments where its manufacturing, energy, and electrical applications trigger higher demand.
So, if the trade war subsides and the Mideast ceasefire holds, silver will likely benefit from rising economic optimism, giving it a distinct investment advantage over gold.
Undervalued but for How Long?
For several years now silver has been called everything from “ridiculously undervalued” to “massively undervalued” and one of the reasons is that the gold-to-silver ratio, which measures how many ounces of silver are needed to buy one ounce of gold, is historically high.
Since the 1970s, the average gold-to-silver ratio has been around 65:1, it currently sits at almost 93:1.
According to an analyst at the Wells Fargo Investment Institute, that makes silver historically cheap relative to gold at least for now — but the improving macroeconomic environment and prospect of easing trade tensions through 2026 could stimulate global industrial activity and significantly increase demand for silver.1https://www.msn.com/en-us/money/markets/silver-is-historically-cheap-compared-to-gold/ar-AA1F8K74
Growing Demand Hits a Silver Supply Wall
According to the Wall Street Journal, while gold continues to garner all the precious metals headlines — silver prices are now at their highest levels in more than a decade and the demand from electronics and solar panel manufacturers continues to increase.2https://www.wsj.com/finance/commodities-futures/silver-prices-surge-8afe2e4b?
This puts silver is in a structural supply deficit as global demand has now consistently outpaced supply for five, consecutive years.
According to the Silver Institute:
“The silver market is forecast to record another significant deficit (total supply less demand) for the fifth consecutive year in 2025. In keeping with previous years, silver industrial demand will remain the key driver of this favorable supply/demand backdrop, with volumes projected to hit a new record high this year.”3https://silverinstitute.org/global-silver-market-forecast-to-remain-in-a-sizeable-deficit-in-2025/
Only 25% of global silver production comes from silver mining. The majority of silver is actually a by-product of other mining activities like in the excavation of gold and copper. This makes ramping up production to meet sudden spikes in demand difficult. According to one industry expert, “rising prices don’t directly stimulate production due to silver’s byproduct nature. Unlike gold, you can’t simply ‘mine for silver’ alone.”4https://discoveryalert.com.au/news/silver-supply-deficits-demand-drivers-2025/
Silver Prices are Catching Up
With silver prices surging to their highest level in over a decade, some investors are now giving the white metal a serious second look. Rising investment demand has triggered a significant silver breakout and indicators suggest that it may now have sturdier legs than gold.
In a recent interview, John Ciampaglia the CEO of Sprott Asset Management, suggests that
investors should be looking as much, if not more, at silver and platinum, where he thinks some of the next bigger moves may be centered among the precious metals boom … Even though platinum has posted stellar numbers this year, he called it and silver a “catch-up” trade that still has room to run.5https://www.cnbc.com/2025/06/17/gold-precious-metals-trade-treasuries-dollar.html
Similarly, a senior trader at German gold refiner Heraeus Group, also suggests that after lagging behind gold, silver is now “catching up” and momentum-driven investors are now rotating into silver.6https://www.mining.com/silver-price-soars-above-36-its-highest-in-13-years/
A host of broad-based macroeconomic factors are supporting silver’s turn for the better:
- A weakening of the US Dollar since Donald Trump’s re-election and his tariff policy are fueling real metals as a safe haven.
- Expected rate cuts by the US Federal Reserve, which favor yield-free assets such as Silver.
- Growing geopolitical tensions, particularly in the Middle East, are boosting overall interest in precious metals.
- Flows into Silver-linked ETFs are on the rise again, while physical supply remains constrained.7https://www.fxstreet.com/analysis/silver-the-forgotten-metal-ready-to-catch-up-with-gold-202506181507
Silver is Precious and Priced Right
Investing in silver provides all of the storied precious metals benefits like portfolio diversification, inflation protection, the stability of owning a tangible asset, intrinsic value, as well as potential price appreciation.
Despite all of its precious metals attributes and critical industrial applications — silver is surprisingly affordable. With gold at almost $3350/oz, platinum at $1327/oz, palladium near $1070/oz, real estate at historic highs and stock prices diverging more and more from fundamentals — silver looks like a prudent and judicious investment.
Even Capital Economics, the world’s leading provider of macroeconomic research and insights was forced to amend its traditionally downbeat take on silver:
“Traditionally, our bearish view on industrial metals, informed by China’s struggling property sector, would lead us to expect weakness in silver demand and prices. But given the growing use of silver in fast-growing and non-cyclical sectors, as well as sluggish supply growth, we think silver prices will rise over the next two years, outperforming both gold and the consensus forecast in the process.”8https://www.capitaleconomics.com/publications/commodities-update/silver-outperform-gold-over-coming-years
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- https://www.msn.com/en-us/money/markets/silver-is-historically-cheap-compared-to-gold/ar-AA1F8K74
- https://www.wsj.com/finance/commodities-futures/silver-prices-surge-8afe2e4b?
- https://silverinstitute.org/global-silver-market-forecast-to-remain-in-a-sizeable-deficit-in-2025/
- https://discoveryalert.com.au/news/silver-supply-deficits-demand-drivers-2025/
- https://www.cnbc.com/2025/06/17/gold-precious-metals-trade-treasuries-dollar.html
- https://www.mining.com/silver-price-soars-above-36-its-highest-in-13-years/
- https://www.fxstreet.com/analysis/silver-the-forgotten-metal-ready-to-catch-up-with-gold-202506181507
- https://www.capitaleconomics.com/publications/commodities-update/silver-outperform-gold-over-coming-years
