December 2025 is shaping up to be a historic month for silver, with the white metal smashing record after record and captivating global markets. On Monday, spot silver surged to a new all-time high of $58.84 per ounce, extending a remarkable rally that has seen prices nearly double since the beginning of the year. In contrast, gold, long regarded as the traditional safe-haven asset, has seen an impressive yet comparatively muted year-to-date gain of approximately 60%. Silver’s dramatic ascent has been driven by a potent mix of supply tightness, speculative interest, and shifting central bank policy expectations. According to market analysts, the rally is being fueled by ongoing shortages exacerbated by a historic squeeze in London in October that reverberated across global trading hubs.
October marked one of the most dramatic moments in recent silver trading history. Faced with mounting demand, London, home to the world’s largest silver vault network, was inundated with a record inflow of silver to alleviate a massive short squeeze. However, while the move temporarily addressed local shortages, it effectively drained inventories from other critical markets. Warehouses linked to the Shanghai Futures Exchange are now holding their lowest levels of silver in nearly a decade. Meanwhile, the cost of borrowing the metal is one indication that stress in the market remains unusually high, signaling ongoing tightness. “The shortages in the global market as a result of the recent squeeze in London are still being felt,” noted Daniel Hynes, Commodity Strategist at ANZ Group Holdings Ltd. “With gold taking a breather, it appears investors have turned their attention to silver.”
Longer-term structural issues are also playing a role. Silver mine production has been on a downward trajectory for over a decade, with major output declines reported in Central and South America due to mine closures, resource depletion, and deteriorating infrastructure. The Silver Institute’s 2025 World Silver Survey highlights that global mine output has struggled to keep pace with demand, creating the conditions for the current deficit.
Silver’s dual role as both a precious and an industrial metal gives it a unique appeal. While industrial demand is currently projected to dip modestly by 2% in 2025 due to slower global economic growth and higher costs, longer-term trends paint a bullish picture.
Silver’s usage in electric vehicles (EVs), artificial intelligence hardware, and renewable energy technologies, particularly photovoltaics, has become a dominant driver. A standard EV contains 25 to 50 grams of silver, but with the development of solid-state batteries, that figure could rise to over one kilogram per vehicle, according to Paul Syms, Head of EMEA ETF Fixed Income at Invesco.
“Silver is only about a tenth the size of the gold market,” Syms explained. “So disruptions and speculative moves have an outsized impact, making it far more volatile but also more rewarding for those on the right side of the trade.”
Silver’s explosive climb has been turbocharged by a wave of speculative enthusiasm. Since last week, silver has risen for six consecutive trading sessions. The trading frenzy came in the wake of a brief but impactful disruption at the Chicago Mercantile Exchange, which impacted futures and options trading and further highlighted the market’s fragile conditions. Interest in call options, financial instruments used to bet on rising prices, has spiked. Bloomberg data show that the spread between call and put options has reached its highest level since 2022, indicating rising costs for those wagering on further gains.
David Wilson, Director of Commodities Strategy at BNP Paribas, described the market movement as “speculatively driven,” with accelerating upside momentum and “fast money” entering the fray. He points to a crucial metric: the gold-silver ratio, which now sits around 70. This means it takes 70 ounces of silver to buy one ounce of gold, a level historically associated with a bullish outlook for silver.
Silver is also benefiting from macroeconomic dynamics. There’s growing consensus that the Federal Reserve will enact a quarter-point rate cut this month, with markets pricing in a dovish turn following a weak labor market and the delayed release of economic data caused by the US government’s six-week shutdown earlier this year. Such cuts generally benefit non-yielding assets like silver and gold, as borrowing costs decline and real yields fall.
Adding to the price momentum are fears over potential trade restrictions. With silver recently designated as a critical mineral by the US Geological Survey, concerns are mounting about the imposition of export tariffs. This has made traders reluctant to send silver out of the US, further tightening domestic supply and increasing the risk premium on American inventory.
India, the world’s largest consumer of silver, has also played a critical role in driving up prices. The country’s agricultural base traditionally turns to precious metals like silver post-harvest as a store of value, and demand surged during this year’s Diwali festival. Silver prices in India jumped 85% year-to-date, reaching a record high of 170,415 rupees per kilogram.
“India’s monsoon season came to an end, the harvest was brought in, and rural populations began investing those earnings primarily into silver and gold,” explained Rhona O’Connell, Head of Market Analysis EMEA and Asia at StoneX. “It’s not just jewelry, utensils, and ornaments; they’re part of the cultural and economic fabric.” While demand rose, supply constraints intensified. Over 80% of India’s silver is imported primarily from the UK, China, and the UAE. But with London’s silver volumes dropping by nearly one-third since 2022, India’s import channels faced mounting pressure.
As silver hovers near the $59 threshold, investors and analysts alike are debating how much higher the “Devil’s Metal” can go. Previous peaks in 1980 during the Hunt brothers’ controversial attempt to corner the market, and in 2011 amidst financial crisis fears, suggest that silver can rally quickly, but also fall with equal speed. However, this time may be different, as analysts argue that silver’s growing industrial importance, combined with a structurally tight supply market and dovish monetary policy, could help sustain high prices over the longer term. “Silver crosses over that bridge between being a precious metal and an industrial one,” Syms concluded. “And given the way technology and electrification are evolving, it’s not unreasonable to think this rally might have staying power.”
For now, silver's shine shows no signs of dimming. As the world watches a potent mix of speculative fervor, geopolitical uncertainty, and fundamental imbalance unfold, the question isn’t just whether silver has more room to rise; it's how fast it can get there.