Silver is giving gold a run for the money.
The precious metal has more than doubled in value since the start of the year and broke a fresh record on Tuesday, rising above $60 per troy ounce on New York’s Commodity Exchange for the first time ever. Now it’s up 102% for 2025 — far outpacing the record-building rush that has lifted gold 59%.
A mix of forces are boosting silver, including the weakened dollar, tariff politics, and supply shortages. Especially critical in recent weeks, though, was the growing expectation that the Federal Reserve would announce another rate cut, which it did on Wednesday, as the U.S. economy continues to slow down. Analysts say that’s likely to further pressure the dollar lower while lifting silver — a classic safe-haven asset — even higher.
In light of Fed concerns, “precious metals prices are rising as a bit of a hedge,” said Michael Farr of the D.C.-based investment firm Farr, Miller & Washington, ahead of the meeting.
But silver’s rise is also a global story with a combination of forces at play. Here’s what you need to know about its soaring popularity.
Dollar weakness and the ‘debasement trade’
The softening of the greenback — which depreciated about 8.5% since the start of the year — is a big part of the story. Most of this drop occurred in the first half of the year, after the Trump administration unleashed steep tariffs on trading allies and competitors alike and reduced U.S. attractiveness as a reliable trade and investment partner. At the same time, rising U.S. debt and lingering concerns about inflation have also diminished the dollar’s value.
The weakened dollar, in turn, has been driving what’s known as the “debasement trade”: Investors are looking for other assets — which include gold as well as silver — because the dollar is no longer seen as ultrasafe as it used to be, said Collamore Crocker of the economic consultancy New Century Advisers.
“‘Concern’ is a big piece of the trade‚” Cocker said. “If you’re worried about governments undermining the value of their own currencies, you might buy precious metals.”
The Fed rate decision could very well push the dollar down even more. Typically, lower interest rates make a currency less attractive for investors because there’s a lower return on assets in that currency.
“Lower rates are bullish for precious metals,” said Bob Gottlieb, an independent consultant who previously worked at JP Morgan and other financial institutions.
The tariff factor
Traditionally, silver tends to be more volatile compared to gold and more sensitive to policy changes, say analysts. Tariffs are a good example. Recently, concerns spiked that the U.S. could add tariffs specifically for silver after it was added to the U.S. Geological Survey’s list of critical minerals last month, along with copper, lead, and other rare metals.
The list allows the federal government to “understand where strategic domestic investments or international trade relationships may help mitigate risk to individual supply chains,” USGS acting director Sarah Ryker said in a statement.
Adding a metal to the list can signal tariffs to come, and many investors reacted accordingly, pushing silver higher. The threat of additional tariffs has also led metals traders to shift silver to the United States and out of London or Shanghai, as a way to preempt the hit from new import taxes on the precious metal.
Demand and supply squeeze
The tariff uncertainty and dollar weakness are coinciding with a long-running silver shortage. A recent report from the Silver Institute estimated industrial demand for silver has soared about 18% over the past four years, due in part to India — now the world’s second-largest market for silver investment, according to Kitco News, a metals publication.
Silver is culturally seen as a “poor man’s gold,” said Hiren Chandaria, managing director at the financial firm Monetary Metals. “With gold prices rising so high, many households and smaller investors have shifted toward silver as a more affordable precious metals store of value, so investment and gifting demand has shot up alongside traditional jewelry and silverware buying.”
Investor demand from India is also spurred by a recent decision by the country’s central bank that allowed for regulated silver-backed loans. The Silver Institute has reported roughly a doubling in silver-backed exchange-traded fund price in India since January 2023, amid a surge of investment.
Beyond India, broader supply crunches are in play. The world’s mines are expected to produce only about 813 million ounces of silver this year, slightly less than they did in 2021, according to the Silver Institute. Mines can only produce so much each year, and it takes many years to get a new one up and running — something that puts a cap on supply.
Industrial demand
The buying frenzy for silver and resulting shortage are also driven by technological change across the industrial world that has unfolded over the past five years.
While gold has relatively little practical use aside from jewelry, silver is a high-quality conductor of electricity and heat and holds a range of industrial applications — “at the cusp of precious metals and industrial metals,” as Chandaria describes it.
Surging investments in electric vehicles and artificial-intelligence data centers, for example, are among the sectors driving demand. Silver is laced throughout electric vehicles and their batteries, which is one reason for its surge during the electric-vehicle investment boom by major automakers in recent years. It’s also used in AI semiconductors.
“There is an inherent tightness still in the silver market … demand is greater than supply every year,” said Bob Gottlieb, a former metals trader with leading financial institutions.
Meanwhile, the silver boom is lifting mining companies. Canada’s Wheaton Precious Metals, the largest silver mining company by market capitalization, has seen its stock price rise close to 85% year-to-date. Fresnillo, a Mexico City-based mining company that bills itself as the world’s leading producer of silver ore, is up 365% since the start of the year, while Mexico’s Industrias Peñoles has risen around 230%. Canadian mining conglomerate Pan-American Silver rose 105%.
Gottlieb, the metals trader, says he believes silver will settle between $50 and $75 an ounce over the next year, adding that he views India’s demand as grounds to stay bullish. But he also urged caution. “I learned a long time ago that whenever you forecast a price, the real movement is not from what you forecasted,” Gottlieb said.
