Silver Surge: Driving Demand Amid Supply Challenges in 2025

Silver has demonstrated significant growth, outpacing gold in 2025 with a rise of approximately 71%, compared to gold’s 54%. However, silver mine production has been on a downward trend for the past decade, particularly in Central and South America, due to mine closures, resource depletion, and infrastructure challenges. Despite a slight decline in industrial demand for silver projected for 2025, its applications are expanding in sectors such as electric vehicles, artificial intelligence components, and photovoltaics. The metal, often referred to as the “Devil’s metal” due to its volatility, has seen record price highs this year alongside gold, which has surged past $4,000 per ounce.

In mid-October, silver prices peaked at $54.47 per troy ounce, marking a 71% year-on-year increase, though prices have since moderated. Experts highlight that the growth is underpinned by a combination of low supply and high demand, notably from India, which remains the world’s largest consumer of silver, primarily for jewelry and decorative items. The timing of silver’s peak demand coincides with India’s harvest season and the Diwali festival, further driving interest and sales.

Moreover, supply issues are exacerbated by the reliance on imports, with significant contributions from the UAE and China, while traditional suppliers like the UK are facing dwindling reserves. London’s silver vaults have seen a sharp decline in supplies, reaching their lowest levels in years, leading to higher borrowing costs for traders. As industrial applications for silver continue to grow—particularly in electric vehicles with increasing silver content—experts anticipate sustained high prices and continued investment interest in silver. The future demand is expected to rise in response to advancements in technology, making silver an increasingly valuable asset as the world shifts toward electrification and sustainable energy solutions.

SOURCE: CNBC