Silver is looking unstoppable. That may be a good reason to steer clear.
Silver is up more than 200% in the past year, including a 37% gain in January, coming partly as President Donald Trump ramped up trade and military tensions with Europe over Greenland.
Now around $98 an ounce, silver isn’t just beating nearly every other commodity—it’s also cruising past gold, its bigger brother in the safety trade. Gold is up 74% over the past year, a respectable gain but far behind silver’s parabolic rise.
Silver does have a great story, and it isn’t entirely about being a haven.
Unlike gold, silver has lots of support as an industrial metal. It’s an excellent conductor of electricity. That makes silver a key component in electronics, including circuit boards, switches, and solar panels. While industrial uses accounted for just under half of silver demand a decade ago, today they’re 60%, according to Metals Focus, a London-based consulting firm.
Industrial demand is rising with new uses like electric vehicles, still going strong in China, Europe, and other regions. Booming electricity demand, fueled partly by data centers related to artificial intelligence, is also supporting silver.
Silver may also be subject to supply shortages. About three-fourths of new silver isn’t mined directly but rather is created as a byproduct of mining other metals such as lead, zinc, and copper. That means a rise in silver prices doesn’t immediately translate into increases in supply. Silver demand has outstripped supply every year since 2018. The deficit last year was 18%. Another shortfall is likely in 2026, according to Metals Focus managing director Philip Newman.
Those solid fundamentals, however, don’t come close to explaining silver’s rise. Nor are they likely to help much when the froth fizzles.
Compared with gold, silver is like a volatile small-cap stock. While more than $33 trillion of gold trades globally, the figure for silver is $5.3 trillion, making it more susceptible to big price swings.
Historically, silver has a beta of 1.4 compared with gold. That means that when gold is up 10%, silver should be up 14%. The math is punishing on the way down, though: If prices fall 25%, to $70 an ounce, it would take a 34% gain to recoup the losses.
“I don’t know how much further this can squeeze before we have some kind of shakeout,” says David Morrison, senior market analyst at Trade Nation, a financial services provider. “It’s been going ballistic.”
The market technicals are nerve-racking. At $94, silver is more than double its 200-day moving average of $46. Ned Davis Research recently said silver faces “extreme overbought conditions,” even before the run-up of the past two weeks.
Another technical indicator, the silver-to-gold ratio, is also flashing red. In May, before the start of silver’s big rally, it took 100 ounces of silver to buy one ounce of gold, well above the 50-year average of around 65. Today the ratio has fallen to 51 as the price of silver has surged. That’s the lowest ratio in more than a decade, despite gold also being in a historic bull market.
Complicating matters is the physical relocation of silver in the wake of Trump’s trade polices. Prices surged last year as investors and financial firms in the U.S. moved silver from London to New York to get ahead of potential import duties.
Prices have continued to rise even as the Trump administration said in January that it doesn’t plan to levy tariffs on silver and other critical minerals. Trump’s latest salvo of tariff threats over Greenland has only raised more questions.
All the same, assuming precious-metals tariffs don’t materialize, silver that has been hiding out in New York will probably continue to trickle back to London, says Robert Gottlieb, a veteran metals trader and author of Mastering Gold and Silver Markets. That would make the kind of supply squeezes that lead to big, unpredictable price spurts less likely. “Liquidity in London is loosening,” he says.
None of this means that silver won’t keep rising. Investors in the U.S. tend to own the metal through exchange-traded funds like the $50 billion iShares Silver Trust. Inflows have been rising, pushing silver holdings in ETFs to 1.33 billion ounces in 2025 from 1.04 billion ounces in 2024, according to Metals Focus. ETFs typically don’t move silver out of London, but the physical silver they acquire becomes unavailable to other traders, helping squeeze supply.
Some advisors caution against buying at today’s prices.
Rob Haworth, a senior investment strategist at U.S. Bank, says the firm has no plans to add silver to clients’ portfolios. “There’s always a lot of interest when the price of something spikes. The challenge is that silver is a small market compared to gold,” he says. “There’s a lot of speculation.”
When the market turns, prices can fall hard and fast. While the Hunt Brothers’ attempt to corner the silver market in the early 1980s has entered Wall Street lore, investors shouldn’t overlook the 2011 bubble. After prices peaked at $49 in late April, it took less than a week for them to tumble about 25% to $36. By year end, silver was around $27.
What’s a “fair” value for silver? Almost no one is arguing that it will fall below $20, where it was in November 2022. The silver-to-gold ratio’s long-term average of 65 pegs silver at around $74, based on Wednesday’s gold price of $4,840 an ounce. That would still represent a gain of more than 100% on silver’s year-ago price of $31.50.
With prices moving so fast, it may be best to wait, according to Nitesh Shah, head of commodities and macroeconomic research at WisdomTree Europe.
He suggests that eager investors wait for the volatile metal to fall into the $70 to $75 range, about where it started the year, before buying in. His year-end price target, based on a combination of gold prices, industrial demand, and other factors, is $88.
“It has gone up 30% in two weeks,” Shah says. “That’s pretty extreme. Those last gains may be sliced off pretty quickly.”
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