In 2025, silver reached new all-time highs, soaring to $54.47 per ounce—an increase of more than 70% in one year. Amid supply shortages, explosive demand from India and industrial sectors, and depleted London vaults, experts believe silver still has significant upside potential. Demand from EVs, solar energy, and AI infrastructure makes the metal one of the key assets of the current cycle.

The Silver Shock: The market experienced one of the biggest jumps in a decade.

2025 marked a rare occasion when silver outperformed virtually all commodities. Amid the gold rally, which saw gold break $4,000 per ounce for the first time in history, silver followed suit, but with much higher volatility.

In October, silver prices hit a record high of $54.47 per ounce , marking the third such spike in half a century. The previous two were the infamous Hunt brothers' episode (1980) and the rally following the US debt crisis (2011).

According to Paul Sims of Invesco, "some traders were forced to transport silver by air rather than by sea, so severe was the shortage." This is a rare situation for a metal that is usually easily stored, transported, and readily available.

Why is silver called the “devil’s metal”?

The term gained popularity due to the sharp and unpredictable price fluctuations that often tear speculators apart. Silver is a market almost 10 times smaller than gold, so the slightest supply imbalance can cause massive price movements.

In 2025, this became especially evident:

Silver production has been declining over the past decade;
large storage facilities, particularly in London, were emptying faster than expected;
India (the largest consumer of the metal) increased imports to almost historical highs.

See how O'Connell (StoneX) frames the situation: "There's virtually no metal left available in London . "
This phrase became key to assessing the market structure: the supply of physical silver had become so limited that overnight metal rental rates reached 200% per annum .

The India Effect: How One Market Upended the Global Balance

India consumes about 4,000 metric tons of silver per year , and most of it goes to:
jewelry;
traditional tableware;
ritual decorations;
investment metal.

The year 2025 has increased this demand through several channels:

1. A rich harvest means more money for farmers
"Farmers don't like banks, so after the harvest they buy gold or, increasingly, silver," O'Connell explains.

2. Diwali (Festival of Lights)
The holiday is traditionally accompanied by a rise in demand for precious metals, and in 2025 this became the catalyst for a local price surge.

3. India as a driver of global demand in conditions of shortage
India imports 80% of its silver metal.
The problem is that supplies from the UK, the largest exporter, have sharply declined due to depletion of reserves in London vaults.

Result: In October 2025, the domestic Indian price reached Rs 170,415 per kilogram – an increase of 85% since the beginning of the year.

London Storage: The Invisible Factor That Crashed the Supply Market

The London Bullion Market Association (LBMA) held 31,023 tonnes of silver in 2022.
By March 2025, the volume had fallen to 22,126 tonnes —a third of its total.

What had long been a "hidden topic" suddenly became a systemic risk: as affordable metal fell, large trades began to put pressure on the physical market.

As a result:
traders paid huge commissions for rent;
delivery times for Western contracts were extended;
delivery was disrupted due to lack of physical metal.
Industrial Demand: Electric Vehicles, AI, Renewable Energy

Silver is a metal with unique properties:
high electrical conductivity;
high thermal conductivity;
corrosion resistance;

The perfect combination for electronics and solar panels.

This is why metal actively absorbs:
1. Automotive industry (especially EVs)
One standard electric car contains about 25 grams , large models – up to 50 grams of silver.
2. Possible silver batteries
If the industry switches to solid-state silver batteries, demand could rise to 1 kg of silver per vehicle.
3. Data centers and artificial intelligence infrastructure
High-frequency servers require materials with better conductivity—silver is indispensable in this regard.
4. Solar panels
Solar PV is the largest industrial consumer of metal.

These factors exacerbate the strategic shortage of silver—and reduce the likelihood of a long-term price decline.

Gold-to-Silver Ratio: The Indicator That Screamed About Undervaluation

The gold to silver ratio in 2025 exceeded 100 , which historically indicates that silver is severely undervalued.

With similar previous values, subsequent years have seen powerful rallies in the “devil’s metal.”
Sims emphasizes: “A high ratio means silver is undervalued—and the market quickly priced that in. ”

Geographical overview: how different regions are responding to the silver shortage

USA
The rally was supported by investment demand and industry.
Europe
Severe pressure on London's physical storage facilities leaves the region vulnerable.
India
The main driver of growth and the world's main consumer.
China and the UAE
We have become actively involved in supplies to India.
Latin America
Production cuts in Mexico, Peru, and Bolivia are exacerbating the deficit.

Forecast: Why Silver Is Still Undervalued

Analysis of available data shows:
supply has been declining for 10 years;
strategic storage facilities are empty;
industrial demand is growing;
India has increased pressure on the market;
the prey physically does not have time to recover;

Technological shifts (EV, AI, solar) create a long-term trend.

Taken together, this means that even after a sharp rise, the price of silver remains structurally supported.

Silver remains one of the few assets where fundamental factors fully support a long-term bullish scenario.

By Claire Whitmore
December 01, 2025

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