To The Moon

Since the start of 2025, the silver market has staged a spectacular rally. By the end of December 2025, silver prices had accumulated a staggering gain of approximately 171%. During the session on December 26, prices briefly touched a high of $80 per ounce before closing the year at around $72.

Entering 2026, $iShares Silver Trust(SLV)$ continues to lead the commodities pack, emerging as the brightest performing asset in the Bloomberg Commodity Index.

Meanwhile, the Gold-Silver Ratio—which measures how many ounces of silver it takes to buy one ounce of gold—has rapidly slid from recent highs to around 57. This is not only far below the long-term average of 68 but also marks a new low since 2013, signaling a strong "catch-up" momentum for silver relative to gold.

1. Market Drivers: A Resonance of Safe Haven & Financial Attributes

This rally is being fueled by a convergence of powerful factors:

• Elevated Risk Aversion: Since 2025, rising geopolitical uncertainty has driven capital into traditional safe havens. A weakening U.S. dollar has further enhanced the appeal of dollar-denominated silver.

• The "Catch-Up" Effect: With gold prices continuing to strengthen, silver attracted significant capital inflows due to its significant undervaluation relative to gold, creating a "chasing gold" dynamic.

• ETF Inflows: In December 2025 alone, global known silver ETF holdings grew by 2.5%, reflecting robust allocation demand from both institutional and retail investors.

• Supply-Side Jitters: Recent export restrictions on silver by China, combined with declining inventories at London Bullion Market Association (LBMA) warehouses, have exacerbated fears of a supply squeeze.

• Industrial Support: High-end tech sectors like AI and electronics manufacturing continue to drive industrial demand, while rising lease rates highlight tightness in the physical market.

2. Fundamentals: A "Tight Balance"

Despite the bullish price action, the fundamental picture presents a "tight balance."

On the bullish side, the explosive growth of emerging industries like AI and electronic devices provides structural support for industrial demand. However, the growth rate of the photovoltaic (solar) industry—a major demand driver in recent years—has begun to slow.

Crucially, sustained high prices are accelerating material innovation and the development of alternative processes, which may curb actual silver usage to some extent in the future.

3. The financial attributes of silver are also crucial

• If we use a 12-month forecast of gold prices at $4,800 per ounce as a benchmark, when the gold-silver ratio reverts to its 30-year average level (68), the theoretical price of silver is approximately $71;

• If this ratio further declines to the 2011 low of 31.71, the price of silver could potentially reach $151.

4. Investment Strategy: Buy the Dip & Look at Miners

For investors looking to position themselves, institutions suggest the following approaches:

The Commodity Play

For silver itself, the long-term upward momentum remains intact, but investors should be wary of short-term high volatility. A strategy of accumulating positions during price pullbacks is recommended.

The Mining Leverage

A potentially more attractive option lies in silver mining stocks. Among the many tickers available, three representative companies stand out:

• $First Majestic Silver(AG)$: Known for its high purity exposure (approximately 57% of revenue comes from silver), this stock offers high elasticity to silver prices.

• $Pan American Silver(PAAS)$ : A global leader in silver mining. Through continuous M&A and resource expansion, it offers a robust financial structure and scale.

• $Wheaton Precious Metals(WPM)$: This company utilizes a unique "streaming" business model. It secures silver production at relatively fixed costs, resulting in significantly lower operational risks compared to traditional miners.

The ETF Route

For investors who prefer a convenient, transparent way to track the spot price without stock-specific risk, the $iShares Silver Trust(SLV)$ remains the standard vehicle for physical silver exposure.

5. Summary:

After a massive rally, silver faces short-term pressure for a technical adjustment. However, underpinned by safe-haven demand, industrial applications, and its financial attributes, it retains structural value for the medium to long term. For those bullish on precious metals but wary of single-commodity volatility, a diversified mix of silver miners and streaming companies offers a prudent way to ride the trend.

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