On 7 November 2025, the USA added silver to its list of critical minerals. The resulting higher likelihood that America could introduce punitive tariffs or minimum prices in order to cover its own demand strengthened fears of a bottleneck on the silver market. The decision led to a correspondingly sharp reaction, with the price of silver having appreciated by almost 130% in the almost three months since then. The precious metal was a scarce commodity even before the rally. “The silver market is on course for a fifth successful structural market deficit,” the Silver Institute (SI) stated at the end of November 2025. According to the industry organisation, designation as a critical mineral has led to silver being delivered into the vaults of the US commodities exchange, the CME, in unprecedented volume.
At the same time, the SI adds, geopolitical and macroeconomic imponderables have persuaded investors to lift their allocations to precious metals in order to diversify their portfolios. “As a result, investment demand has strengthened noticeably,”, it says. Specifically, the experts estimate that physically-backed exchange-traded products (ETPs) will have seen net inflows equivalent to 200 million ounces of silver in 2025. That would mean a 225% increase in investment compared with the previous year. The SI expects demand in all other segments of the silver market to decline. The principal buyer is industry, which the SI says has suffered from both the soaring price and the uncertain economic environment. Manufacturers of photovoltaic modules, for instance, are trying to make do with smaller volumes, so demand from this sector for silver is set to have shrunk by 5% in 2025.
Rising recycling volumes mean that the supply of silver has likely increased somewhat. Overall, however – even excluding the ETP inflows – the institute still expects a deficit for 2025 (see graph 1). The organisation, which is based in Washington D.C., has not yet published a forecast for the current year. Nevertheless, it is in no doubt that the special electrical and thermal conductivity properties of the raw material make it an indispensable component for technological change. “As a result, global silver industrial demand is poised to grow further,” the SI stated in December. Alongside photovoltaics and e-mobility, the experts also cite artificial intelligence (AI) as a driver. “ As digitalization and AI adoption accelerate, so does the demand for critical minerals, such as silver, used in their applications,” the organisation reckons.
Despite this structural trend, many an investor is likely to have doubts when they look at the steep rise in the commodity’s chart. The gold/silver ratio is also showing signs of overheating. This figure indicates how many ounces of silver are needed to buy the same amount of gold. The benchmark for the relative valuation of the precious metals recently fell below the 50 mark for the first time in almost 24 years. The ratio is simultaneously well belong its long-term average (see graph 2). Silver is thus expensive in relative terms. Against this background, it may make sense for investors who are not yet exposed to wait for a correction. In general, the tense geopolitical climate, combined with the prospect of further interest rate cuts in the USA and the predicted structural growth in demand, suggests that silver will remain in focus.
e=expected; source: Silver Institute; as at 13 November 2025. Past performance is not a reliable indicator of future performance.
Source: Reuters, own calculations, as at 26 January 2026. Past performance is not a reliable indicator of future performance.