Silver Set to be Top Commodity Performer for 2025
How high can silver surge?
Even before silver’s remarkable rally over the past week, it was on track to be the strongest performing metal of 2025, more than doubling over the course of the year.
Silver was the second-best performer of 2024, behind gold, rising by just over 20%.
It started 2025 at just under US$30 an ounce and was the third-best performer of the first half of the year, behind platinum and gold, gaining a further 25%.
However, in the second half of 2025, the rally has really accelerated, with silver surpassing US$50/oz for the first time ever in October.
In Monday trade in Asia, spot silver had reached an all-time high of just under US$84/oz but had pulled back to around US$76/oz at the time of writing.
It caused silver’s market capitalisation to peak at US$4.65 trillion, briefly surpassing Nvidia (NASDAQ: NVDA).
China makes moves
On Saturday, Bloomberg reported that the UBS SDIC Silver Futures Fund LOF, China’s only pure-play silver fund, was turning away new customers after its repeated risk warnings went unheeded.
“The fund’s manager announced the unusual step in a statement Friday after multiple actions – from tighter trading rules to cautionary advice about ‘unsustainable’ gains – failed to quell an eruption of interest fuelled by social media,” the report said.
The silver rally also comes as China is about to impose tighter restrictions on silver exports.
As announced in October, companies will now need a license to export silver, which could result in further tightening of the market.
The looming ban caught the attention of Elon Musk, who responded to a post on X about it.
Deficits roll on
Silver is forecast to be in deficit in 2025 for the fifth consecutive year.
According to a report by Oxford Economics for the Silver Institute, global silver industrial demand is set to further rise over the next five years due to its use in solar photovoltaics, electric vehicles (EVs) and data centres.
In 2014, just 11% of silver industrial demand came from the solar sector, rising to 29% in 2024.
EVs consume 67-79% more silver than internal combustion vehicles, equating to 25-50 grams per EV.
The report forecasts global automotive silver demand to increase at a compound annual growth rate of 3.4% between 2025 and 2031.
The report estimates that total global information technology power capacity increased by approximately 53 times, from 0.93GW in 2000 to nearly 50GW in 2025, again translating to higher silver demand.
ANZ Research said silver’s supply-demand balance was supportive.
“Constrained mine supply and strong industrial demand have been keeping the market undersupplied since 2021. Industrial demand from electronics, solar, EVs and data centres continues to provide a solid base for industrial demand,” it said earlier in December.
“The structural market deficit will likely continue in 2026, further drawing on inventories and keeping the market sensitive to supply or demand shocks.”
Forecasts looking dated
Just like gold, silver price forecasts for 2026 are already looking stale.
On December 1, UBS published its forecasts for 2026, suggesting next year would be the high point for silver, averaging US$56/oz.
Australian firm Argonaut lifted its 2026 forecasts by around 40% this month.
It expects silver to average US$63/oz in the March 2026 quarter, US$66/oz in the June quarter, US$64/oz in the September quarter and US$67/oz in the December quarter.
Argonaut’s near-term forecast sees the silver price peaking at an average of US$69/oz in the June 2027 quarter.
ANZ warned of downside risk for the price due to the rally.
“We expect the US to exempt silver from tariffs, given it is a net importer. Confirmation of an exemption could see metal flowing out of the US, easing the tightness in supply,” it said.
Silver’s relative valuation against gold appeared “somewhat stretched”, according to ANZ, which could potentially prompt funds to rotate back to gold.
“Unlike gold, silver is considered a tactical asset and lacks central bank demand,” it said.
“Furthermore, slowing economic activity poses another headwind for the metal, and higher prices could trigger some thrifting in industrial applications or bring invisible inventories to market.”