Silver has become one of the best performing assets of 2025, surpassing gold in terms of price dynamics. The metal recently hit a new all-time high of more than $84 an ounce, and more analysts are considering a scenario where the price could top $100 in 2026.
The spectacular growth is no accident and is driven by a combination of factors: accelerated industrial demand, structural supply shortages and major changes in China’s trade policies.
Demand for such assets is also supported by escalating geopolitical tensions. US President Donald Trump said on Monday (January 12) that any country doing business with Iran would face a 25% tariff on trade with the US. Washington is currently weighing the response to the crackdown on the biggest anti-government protests in years in the oil-exporting nation. The unrest in Iran comes as Trump asserts his influence internationally after capturing Venezuelan President Nicolas Maduro and discussing taking over Greenland by purchase or force.
In this context, Citi analysts raised their three-month price targets to $5,000 per ounce for gold and $100 per ounce for silver, respectively. Recall that spot silver fell 0.1% on Tuesday, January 13, to $84.86 per ounce, after Monday’s record high of $86.22.
Why is silver so important?
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Unlike gold, which is mainly used as a safe-haven asset, silver has a much more pronounced industrial component, which makes it much more sensitive to economic cycles and technological evolution.
According to The Silver Institute, because of its chemical properties, silver is a commonly used catalyst essential for the production of two major industrial chemicals: ethylene oxide and formaldehyde. Both are key elements for everyday products such as plastics, adhesives, carpets, textiles, antifreeze and even clothing.
Furthermore, silver is one of the best electrical conductors, widely used in electronics and semiconductors, solar panels and renewable energy infrastructure, electric vehicles, artificial intelligence equipment, data centers, and medical and defense applications.
According to the cited source, over the past eight years, industrial demand for silver has grown steadily, from nearly 31,000 metric tons in 2016 to more than 36,000 metric tons in 2024. In the automotive industry alone, The Silver Institute anticipates that global silver demand will grow from 2025 to 2031 at an average annual rate of 3.4%. Electric vehicles consume an average of 67-79% more silver than models with internal combustion engines. Consequently, about 25-50 grams of silver are used for each vehicle.
Strong demand, insufficient supply
According to specialist Claudiu Cazacu, the silver advance was fueled by two major sources. “Silver participated in the general advance of precious metals. On the other hand, the specific conditions in the market determined a much more pronounced price dynamics. If we have (…) about 62-63% advance for gold last year, for silver we have about 141%. It depends, if we look at the spot, at futures… It is not surprising only in terms of amplitude, not as a general trend”, he said, for DigiEconomic.
The major difference comes from industrial demand. The energy transition, expanding production capacity for renewable energy and the growth of the electric car industry have pushed demand for silver to record levels.
At the same time, global production is failing to keep pace. For several years, the market has been in a structural deficit: mining effort, together with recycling, does not cover the needs of the real economy.
China has put “gas on the fire”
A key moment was China’s decision to restrict silver exports starting January 1, 2026. Beijing moved silver from the category of common industrial metals to that of strategic materials, subject to a strict licensing regime similar to that applied to rare earths.
China is one of the largest producers and holders of silver reserves globally. According to data from Wind Information, cited by CNBC, the country exported more than 4,600 tons of silver in the first 11 months of 2025, far exceeding the amounts it imported.
The restrictions mean less silver reaches international markets, with Beijing keen to protect domestic consumption for strategic industries such as energy, technology and AI. Moreover, the decision came in continuation of the strategy of the United States, which added silver, in November, to the national list of critical minerals.
“It was kind of the straw that broke the camel’s back. When the market was already growing and when the deficit was already high for several years, global stocks are down, they’re way above the levels of a few years ago, and then China comes along and says ‘if you want to import from us, you have to get a special permit’, and only certain companies can do it, the big ones. So, all of a sudden, there’s demand in an already tight market. And that put the gas on fire in the silver trend, which had an absolutely spectacular year”, explained Cazacu.
The chase for physical silver
Another important factor was the difference between financial trading and the physical availability of the metal. Much of the market is dominated by derivatives and ETFs. When the trend becomes extremely strong, bearish investors are forced to close their positions, which creates additional demand for physical silver in an already scarce market.
“This increase a had the support this year from the migration to precious metals as a safe haven asset etcand, in addition, a certain rush to own physical stocks of silver. PI think there is a difference we have to make here. There is a trading of some financial instruments that is backed by some ETF funds that physically hold silver. But, in addition to these ETFs, what is called paper trading, i.e. the transaction of financial instruments, is being created a lot. It’s about the use of tools that often involve leverage.
And that means that when a certain trend sets in, those who can’t hold their positions are forced to come up with money from home or close out those positions. And they can do it when the movements are small, but when the trend is very strong it produces a kind of spiral of necessity. Those physical possessions are required. And it seems that the high velocity that we saw occasionally last year, of silver appreciation, was also driven by this need to close out some losing positions, the positions of those who were selling silver. And then we see a rush for physical silver, to close some financial transactions, while physical silver was becoming more and more rare”, the specialist added.
Will 2026 be the ‘year of silver’?
In the medium and long term, the outlook remains favorable, but experts warn that the exceptional pace of 2025 is unlikely to be repeated.
Opening new mines and expanding production capacity is a time-consuming process, and silver is often a by-product of the extraction of other metals, which limits the rapid response of supply.
“The balance is still leaning towards a favorable dynamic. I expect that at the end of the year we will rather have higher quotes than now. I don’t expect the course to be as simple and with only minor corrections as it was last year. Rather, we have room for more pronounced adjustment episodes. (…)
The solution to high prices is even higher prices, which ultimately encourage supply. We will have growth, but it will take more time. So, I would say that the variables are oriented towards a trend that will continue, but history warns us that it is quite unlikely that we will repeat the percentages that we have seen in 2025. But, the longer the time horizon… the ratio of supply and demand in the physical market and the desire to take refuge in relatively safer assets go hand in hand to suggest a still favorable scenario”, explained the specialist.
Moreover, a signal of caution comes from the growing involvement of retail investors, which can amplify volatility. “It could be a component in which the price moves much too quickly and may end up in an area difficult to maintain in the short term. But, again, if we go to the horizon of the next year, the variables seem to be aligned favorably further. But in the short term, so weeks, months, days, the risk of correction cannot be ignored”, he concluded.
