By Anthony Milewski , The Oregon Group
A record rally fueled by supply squeeze and safe-haven demand
- silver’s record surge: the price of silver more than doubled in 2025, rallying 120%
- supply deficit: silver demand reached 1.17 billion ounces in 2024, outpacing mine supply by a staggering 500 million ounces; 2025 marks the fifth straight year of shortage, with another shortfall expected in 2026
- energy transition tailwind: silver’s role in tech is soaring, from data centers to solar panels; the IEA sees solar capacity quadrupling by 2030
The price of silver broke all records in 2025, and by December surged above US$65 an ounce — up more than 120% in January, beating even gold’s meteoric rise of 64% over the same period.
There’s significant upward momentum across nearly all metals and commodities—a trend we’ve been forecasting for years. While we typically avoid prediction pieces, silver currently sits at the intersection of several highly favorable market conditions.
To put it simply, like so many of the critical minerals we cover, it is in a supply deficit, with soaring demand, fragile supply chains and impacted by the debasement trade. But, what really sets silver apart, unlike so many other critical minerals we cover: silver is both an industrial and precious metal.
Industrial demand
Industrial demand accounts for more than half of all silver demand, and it has been relentless despite recent economic headwinds. In 2024, global industrial silver consumption jumped to 689.1 million ounces – a record high. The three big drivers include:
- photovoltaic demand (solar panels)
- electric vehicles
- data centers and AI
The reason: silver has the highest electrical conductivity of any metal.
In 2025, the US added silver to its critical minerals list, a clear acknowledgment that the metal is no longer just monetary or industrial, but strategically essential to clean energy systems and high-tech manufacturing, on par with rare earths and other battery metals.
Solar photovoltaics
Installed photovoltaic (PV) capacity has increased more than x10 since 2013, led by China (51% of growth), Europe (15%), and the USA (9%) — and silver demand in PVs has risen nearly x4.
And the IEA forecasts solar PV capacity will expand by 3,200–4,400 GW by 2030.
Electric Vehicles
EVs, especially battery electric vehicles (BEVs), consume on average 67-79% more silver than internal combustion engines (ICE).
The Silver Institute estimates silver demand by the automotive industry will increase at 3.4% CAGR between 2025-2031, with demand from EVs overtaking ICE by 2027 — and the growing technological sophistication of EVs set to boost demand further.
Data Centers
Due to its conductivity properties, silver is essential for a range of technologies across the Artificial Intelligence boom (see our report, Artificial Intelligence and the next Critical Mineral Supercycle), including:
- AI servers and switches: for example, silver is used in multi-layer ceramic capacitors (MLCCs) that are essential for high-power components in advanced servers and switches
- electronic components: for example, silver is used in silver-palladium (Ag-Pd) MLCCs, which are crucial for high-frequency and high-speed data transmission in AI devices
- circuit boards and bonding wires: for example, silver is also used in printed circuit boards (PCBs) and as bonding wire in chip and memory packages; these applications are vital for the efficient functioning of AI hardware
Supply crisis
Just as demand is rising, so supply is tightening. Heading into 2026, the silver market is grappling with one of its longest-running shortages in modern history.
Silver mine output peaked in 2016 with total global mine production approx 900 Moz, and falling to an estimated 835 Moz in 2025.
2025 will see the fifth successive silver deficit, estimated at 95Moz. For 2021-25, this results in a cumulative deficit of almost 820Moz.
The decline in supply is due to a variety of issues, including, short-term, operation disruptionsto regulatory challenges in key producing countries; but, long-term, ore grades have fallen at many mature operations with closures across major producers in Mexico, India, Russia, Bolivia, Kazakhstan, and Peru.
There are two principal ways silver is mined, each putting their own specific constraints on supply:
- approximately 71% of mined silver supply comes as a byproduct from polymetallic gold, lead, zinc and copper mines. This means higher silver prices do not necessarily translate to higher production, though they may incentivize more scrap generation and liquidation of investment positions
- approximately 29% comes from primary producers, but all-in sustaining costs(AISC) increased by 25% year-on-year as costs rose with interest rates and inflation
There has been a long stretch of under-investment in exploration and new projects, and new mines can take an estimated 18 years to build.
Silver and the debasement trade
The return of inflation and the US Federal Reserve’s pivot from tightening to rate cuts have supported a rush into precious metals — the so-called debasement trade.
Gold’s rise above US$4,300/oz in 2025 has grabbed the headlines, signaling deepening investor anxiety over currency debasement and geopolitical strife, but it’s silver — traditionally the high-beta “poor man’s gold” — that caught gold’s slipstream, but then outpaced it.
A weaker dollar and lowering of interest rates by the Federal Reserve turbocharged the rally, attracting a wave of speculative and safe-haven money into precious metals. So much so, that precious metals (and other hard commodities) are competing with crypto and bitcoin in a great rotation and flight to safety.
For full story: https://theoregongroup.com/commodities/gold/can-silver-hit-150-in-2026/?utm_source=chatgpt.com