Category: Silver

Silver’s newest milestone signals a structural shift in both the precious metals market and the broader economy — one no investor can afford to overlook. This isn’t just another record; it’s the clearest expression yet of a rapidly evolving financial landscape. The ripple effects are only starting to surface, and understanding them now can help investors position their portfolios for stronger protection and greater upside.

Silver’s Historic Break Above $60

Silver has crossed $60/oz for the first time in history, coming close to $64/oz in intraday trading. This new record brings the metal’s year-to-date gains to an eye-catching 114%. For context, gold prices — which have also hit all-time highs above $4,000/oz — are up 61%.

The shiny metal has not only doubled in 2025, but it has nearly doubled gold’s growth, which underscores the metal’s remarkable strength. This rally is being driven by a rare combination of persistent supply shortfalls, booming industrial demand, supportive monetary policy, and broader economic weakness.

Core Market Drivers Behind the Silver Surge

Industrial Demand Acceleration

Industrial demand remains one of the single largest sources of consumption for the silver market, and the subcategories continue expanding. The solar industry remains the most active buyer, although electric vehicles and hybrids are using more silver.

Power grid upgrades and broad electrification efforts are also expanding demand. Artificial intelligence is among the fastest-growing and transformative sources of silver demand.

ETF Positioning and Investment Flows

This industrial consumption is complemented by robust investment flows. Silver exchange-traded funds saw an influx of 487 tons in November and 475 tons in December already.

For reference, about 78% of the London Bullion Market Association’s (LBMA) vault silver is now tied up in exchange-traded products, up from 65% in late 2024. Global ETF holdings stood at 1.13 billion ounces recently, still 7% below the prior peak of 1.21 billion ounces in early 2021.

Multi-Year Supply Deficit

The imbalance between available supply and sustained demand has led to five straight years of a supply shortfall. The 2025 deficit is expected to hit 125 million ounces, bringing the cumulative supply gap to 800 million ounces since 2021. This supply strain is hampered by lackluster mine production and recycling, which have been largely flat for over a decade.

Tight Physical Inventories

Perhaps nowhere is this supply dearth more readily apparent than at the world’s largest bullion reserves. Earlier this year, the LBMA vaults struggled to keep pace with surging demand, leading to a 39-times spike in borrowing costs.

Sprott analysts note that free-trading inventory has shrunk to the point where modest demand increases create price convexity, meaning prices jump faster than normal in response to supply shortages.

Macro Drivers Supporting the Rally

Federal Reserve Policy Rate Expectations

The Federal Reserve’s dovish stance on the economy is paying dividends for silver’s performance. Historically, precious metals generate heightened demand during periods of quantitative easing as the opportunity cost of owning non-yielding assets diminishes.

This phenomenon played out in real time this week as silver prices leapt on the news of another Fed rate cut. The central bank is expected to make two more cuts in 2026, suggesting further tailwinds for silver.

Strategic Stockpiling

Another pillar of silver’s strong foundation is strategic stockpiling and an aggressive posture around the globe. Recently, President Trump added silver to the U.S. critical minerals list, indicating strategic protection and policy alignment in the future.

At the same time, some central banks — most notably Russia and China —  appear to be diversifying portions of their physical reserves into silver, which supports long-term de-dollarization efforts. Beijing even plans to implement silver export controls in 2026, adding further pressure to global supplies given its leading role in silver production.

A Technical Breakout 50 Years in the Making

All of these forces are unfolding at the same time that silver is completing one of the most important technical patterns in its modern history. For the past five decades, silver has been forming a cup and handle pattern. The shiny metal’s current breakout above $60/oz is the culmination of this half-century build-up.

50 year silver cup and handle chart pattern

Now, silver has officially entered price discovery mode, with no historical price ceilings in the way. At this point, $100/oz silver is on the table. With market pressure still intensifying, the move to this next threshold may unfold sooner than many investors expect.

This 50-year cup-and-handle formation is so, so bullish.

–Precious Metals Advisor Tim Murphy

Central banks are still aggressively accumulating gold, and October delivered the strongest monthly net demand of the year. Official demand reached 53 tonnes, marking a 36% month-over-month surge. The spike in consumption followed a solid Q3, when central banks added 220 tonnes even as record-high gold prices earlier in 2025 had briefly moderated the pace of buying.

Once again, emerging markets lead the gold buying frenzy, with many global reserve managers signaling further purchases into 2026. The renewed momentum underscores that central banks continue to treat gold as a strategic, long-term asset, not a short-term trade.

YTD Buying Remains Strong

Following a temporary dip in purchases, official buyers hit a major stride in October, reaching an annual high in gold demand. In total, central banks bought 53 tons, bringing year-to-date purchases close to 687 tons.

Governments kicked off the year enthusiastically, sweeping up 242 tons. This came after three consecutive years of 1,000+ tonnage demand. Purchases waned slightly in Q2, reaching only 172 tons. Q3 marked a resurgence as total purchases stretched to 220 tons.

October’s year-to-date peak indicates that official appetite is growing into the end of 2025 and beyond. Despite this revival in gold interest, it’s still unclear if central banks will clear the 1,000-ton hurdle that’s been held since 2022.

Emerging-Market Central Banks Are Driving Demand

Another recurring theme in the gold market is the disproportionate demand stemming from emerging markets.

Q3 and October gold purchases were dominated by smaller, regional economies looking to shore up their currencies in the midst of a global de-dollarization push. The National Bank of Poland remains the single largest source of gold demand, accumulating more than double the runner-up, Kazakhstan.

China is another recurring name on the gold-buying leaderboard. October marked 12 straight months of physical gold consumption, bringing Beijing’s total reserves to 2,304 tons. That represents a staggering 8% of the country’s foreign exchange reserves — a growing trend among foreign nations as gold becomes the world’s number-two reserve asset.

While China’s reported gold buying is significant, many analysts believe the country is deliberately underreporting its purchases as part of a broader effort to test the dollar’s dominance.

Central Banks Increasing Gold Targets for the Future

Earlier in the year, the World Gold Council’s Central Bank Gold Reserves Survey reinforced a rising trend in official-sector demand. The results showed that 95% of reserve banks planned to increase their physical stockpiles over the next 12 months, a forecast which turned out to be true.

Recently, various central banks have announced similar plans with time horizons well beyond 2025, underscoring how these intentions translate into concrete policy actions:

• The National Bank of Serbia plans to raise its gold reserves to at least 100 tonnes by 2030, nearly doubling from current levels, signalling renewed long-term commitment to bullion.
• At the most recent London Bullion Market Association (LBMA) conference in Kyoto, the central banks of Madagascar and South Korea signalled they are looking to increase their gold reserves.
• The Central Bank of Kenya (CBK) said it is “actively considering” adding gold to its reserves as part of a strategy to diversify away from heavy reliance on U.S. dollar-denominated assets.
• Several African central banks, including those in coastal and landlocked states, are showing renewed interest in gold accumulation as a hedge against forex-market volatility and global uncertainty.

Buying Trends Point to Strategic Behavior

Despite record-high gold prices, emerging-market central banks continue to accumulate gold at a steady and deliberate pace. Participation also broadened throughout the year, with several previously inactive central banks returning to the market, reinforcing that this is a structural, long-term trend, not a fleeting spike in buying.

The WGC notes that the strategic case for gold remains “front and center” for reserve managers heading into Q4.