Gold is not the only metal impacted by rising inflation and rates; silver is experiencing similar pressures.
Silver prices have soared approximately 75 percent this year, supported by investors being in search of safe havens, as well as robust industrial demand and remaining supply deficits.
Silver futures in New York rose by 7 percent on Monday and reached an all-time high of about $52.63 a troy ounce, breaking a record set in 1980.
Another real-time indicator of the value of silver is the spot silver prices, which also reached the record high of over $52 a troy ounce. Spot silver also increased its gains after it hit the $50 mark on October 9, the first time since 1980.
This year, traders have resorted to hard assets such as gold and silver as safe investments and means to hedge against geopolitical instability and economic uncertainty, due to fear of tariffs and inflation, fear of Federal Reserve independence, and government debt burdens.
Silver has been on a stomper, with the momentum of the historic gold rally. It is regarded as a haven investment in metal that is a cheaper and alternative investment to gold, which has recently hit a high of $4000 troy ounces a pound, the first time in history.
CEO of Silver Institute, Michael DiRienzo, in conversation with CNN, stated that “There’s just a lot of concern about the global economy, and when that happens, people turn to hard assets like silver.”
Although investor demand is increasing the prices, silver also has extensive industrial applications, such as in the construction of data centers, solar panels, and smartphones.
In an Email, Commodities strategist of ING, Ewa Manthey, wrote, “Its dual role as an industrial metal and safe-haven asset has amplified the rally, making 2025 a historic year for silver.”
Supply issues are also a possibility that might be the basis of an increase in prices.
Vice President and Senior Metals Strategist of Zaner Metals, Peter Grant, said that the silver market is in its 5th year of a structural supply deficit due to “stagnant mining output” lagging mining production behind demand.
He added in an Email that “Strong and growing demand for silver, combined with a persistent supply deficit, is a recipe for higher prices.”
The two-year soaring of the gold prices has been caused by the diversion of investors into safe havens. The reduction in dependence on the dollar by central banks and the accumulation of reserves of gold further increased prices.
This year, the safe-haven rally has extended to other precious metals such as silver and platinum. Silver and platinum, which are up approximately 75 percent and 80 percent this year, are both performing better than gold, which is up almost 51 percent.
Wall Street traders and fund managers seeking to hedge against a weaker dollar have also become the beneficiaries of precious metals and bitcoin.
Investors are able to access silver through the purchase of bars or coins and through investment in silver-supported exchange-traded funds. The iShares Silver Trust ETF has shot up about 68 per cent this year.
According to the Chief Investment Officer of Sprott Asset Management, Maria Smirnova, the inflows into silver ETFs this year are the highest since 2020.
Smirnova added, “Silver’s steady climb is turning into a breakout. Supply is thinning, and investors are taking notice.”
