Silver has quietly had one of the strongest runs of any major asset this year, and it hasn’t gotten nearly as much attention as gold’s headline grabbing rally. As of today, silver is trading around $61 an ounce up roughly 26% over the past year, after touching a historic intraday high near $64 in December. Some major banks think it’s just getting started.
If you’ve been watching gold climb and wondering whether silver deserves a place in your portfolio too, here’s what’s actually driving this, and what to weigh before buying in.
The Core Story: Five Years of Shortfall#
Unlike gold, which moves mostly on investment demand and central bank buying, silver has a genuine supply and demand problem underneath it. The market has now run a structural deficit for roughly five consecutive years meaning the world is using more silver than mines are producing, year after year.
The 2025 shortfall alone is estimated at around 117 million ounces (about 3,660 tonnes) one of the largest deficits on record. Meanwhile, mine production has stayed essentially flat at roughly 813 million ounces annually. Mining more silver isn’t simple or fast; a lot of it comes as a byproduct of mining other metals like copper, zinc, and lead, so producers can’t just ramp up silver output on demand the way they might with a primary commodity.
That persistent gap between what’s dug up and what’s consumed is the structural engine behind this rally it’s not just sentiment or speculation.
What’s Actually Eating the Supply#
Solar power is a massive and growing consumer. Every photovoltaic panel uses silver paste for its electrical conductivity, and solar installation has been expanding rapidly worldwide. As more countries lean into renewable energy buildouts, this demand line only grows.
Electronics and AI related hardware are consuming more too. Silver’s conductive properties make it essential in a huge range of electronics, and industrial fabrication demand hit a record this past year, partly tied to the broader electronics and data center buildout happening alongside the AI boom.
EV production is an emerging, growing demand source. Electric vehicles use meaningfully more silver per unit than traditional internal combustion vehicles, mostly in electrical components and connectors. As EV adoption continues, however unevenly across markets, this adds another steady pull on available supply.
And investment demand hasn’t gone away either. Silver serves a dual role part industrial commodity, part inflation hedge and safe haven asset, similar to gold. With inflation concerns and currency volatility still very much part of the conversation this year, investors have been adding silver to portfolios for the same reasons they’ve been buying gold, on top of all the industrial demand already pulling on supply.
How High Could It Go?#
Forecasts vary a lot, which tells you something about how much uncertainty is baked into any prediction here. Bank of America has set a 12 month target of $65 an ounce a relatively modest move from here. BNP Paribas has floated $100 an ounce by the end of 2026 as a more bullish safe haven scenario. A few of the most aggressive calls, including from some analysts at BofA, Citi, and Reuters surveyed strategists, have even floated numbers as high as $300 though that’s firmly in outlier territory and would require a genuinely extreme set of circumstances to materialize, not a base case.
The honest takeaway: nobody actually knows where this goes, but the range of credible forecasts (from modest gains to a potential doubling) tells you this is a market a lot of serious analysts think still has room to run, even after the gains already made.
Silver vs Gold: Which One Actually Makes Sense for You#
These two metals get lumped together constantly, but they behave differently, and it’s worth understanding why before choosing between them.
Gold is driven mostly by investment and safe haven demand central bank buying, currency concerns, geopolitical uncertainty. Its industrial use is minimal. It tends to be less volatile and is the more “pure” hedge against inflation and currency risk.
Silver is driven by a mix of investment demand AND genuine industrial consumption, which makes it more volatile in both directions. When industrial demand is strong (like now, with solar and electronics booming), silver can outperform gold significantly. But that same industrial link also makes it more sensitive to economic slowdowns if global manufacturing or solar installation growth cools off, silver’s demand picture weakens in a way gold’s doesn’t.
Historically, silver tends to move in the same direction as gold but with bigger swings it’s often described as “gold with leverage.” That cuts both ways: bigger gains in a rally, bigger drops in a correction.
Ways to Actually Get Exposure#
If you’ve decided silver is worth adding to your portfolio, there are a few common routes:
- Physical silver coins or bars. Tangible, but you’ll pay a premium over spot price and need to handle storage and insurance yourself.
- Silver ETFs funds that track the spot price of silver without requiring you to hold the physical metal. Generally the simplest, most liquid option for most investors.
- Silver mining stocks shares in companies that mine silver. These can offer leveraged exposure to silver price moves (miners’ profits swing more than the metal price itself), but you’re also taking on company specific risk operational issues, management decisions, geopolitical risk tied to where the mine is located.
- Silver streaming and royalty companies a less common middle ground option that provides financing to miners in exchange for a cut of future production, generally considered lower risk than owning mining stocks directly while still offering leveraged upside.
What to Actually Weigh Before Buying#
Size the position reasonably. Silver’s volatility means a small allocation can meaningfully move your overall portfolio. Most investors who hold precious metals as a hedge keep them to a modest single digit percentage of their total holdings, not a core position.
Understand you’re betting on two different stories at once. A silver investment is simultaneously a bet on continued industrial demand growth (solar, EVs, electronics) and a bet on silver’s role as a monetary hedge holding up. If you’re only interested in one of those stories, it’s worth knowing you’re getting exposure to both.
Don’t assume the deficit closes the rally’s logic automatically. A supply deficit supports higher prices, but it doesn’t guarantee them plenty of commodities have run structural deficits for years while prices stayed range bound, because demand growth projections don’t always play out as expected, or because above ground stockpiles get drawn down to fill the gap for longer than anticipated.
The Bottom Line#
Silver’s rally this year isn’t just a copy of gold’s story it’s got its own, genuinely structural engine behind it: five straight years of supply deficits meeting growing demand from solar, electronics, and EVs, layered on top of the same safe haven appeal driving gold higher. Whether $65 or $100 an ounce turns out to be the right forecast, the underlying supply demand imbalance is real and not something that resolves quickly. Just go in sized appropriately, and understand you’re betting on both an industrial growth story and a monetary hedge story holding up at the same time.