Editor’s Note
This analysis examines the drivers behind silver’s unprecedented price surge, highlighting a structural supply deficit amplified by geopolitical factors. While the momentum is clear, investors should carefully consider volatility and market timing.
Silver has surged 318.5% in one year, reaching a new all-time high of $119. Is it still worth chasing silver? Why has it risen so much? Summary in one sentence: There is a global silver shortage, with an annual deficit of 7%, compounded by China’s export restrictions, U.S. strategic stockpiling, and geopolitical safe-haven demand driving prices higher. Below is the core logic behind the price increase that has been researched, which I hope will be useful for those fortunate enough to see it.
Data source: World Silver Association 2025 Report.
Global supply: 1.04 billion ounces/year (mining + recycling).
Global demand: 1.12 billion ounces/year (industrial + investment + jewelry).
Gap: 0.8 million ounces (7% deficit).
This gap has not only existed in 2025 but has been present from 2020 to 2025 and is expected to widen further in 2026.
First, look at the demand side: booming industrial use.
60% of silver is used in industry, not jewelry.
Solar panels: account for 20%, annual growth of 15%. Reason: Global carbon neutrality policies, every country mandates solar installation.
Electric vehicles: account for 15%, annual growth of 30%. Reason: Ban on gasoline vehicle sales, silver used in EVs is double that in gasoline vehicles.
Electronics/5G/AI: account for 25%, annual growth of 10%. Reason: Massive construction of semiconductor chips and 5G base stations.
Key point: Silver is irreplaceable in industry; only a small part can be substituted by copper, which would affect performance.
Data source: U.S. Geological Survey 2025 Report.
Global proven reserves: 640,000 tons. Annual production: 25,000 tons. Estimated lifespan: approximately 25 years.
Note: This is based on the amount extractable with current technology, excluding offshore silver or that which cannot be mined.
What are by-product minerals? Silver incidentally extracted when mining copper, lead, and zinc, not specifically targeted.
Lead and zinc ores: 30%, copper ores: 27%, gold ores: 14%. Total: 71%. Dedicated silver mines: 29%.
Why can’t production increase?
The main revenue for mine owners comes from copper; silver is a by-product. Even if silver prices soar, they will not specifically dedicate efforts to extract silver; more silver is only produced if copper prices rise.
Even if silver prices soar, mine owners planning to open new mines: Exploration → Environmental assessment → Construction → Production. The entire process takes 5 to 10 years. In the short term, production cannot increase.
Summary: Demand side: Industry accounts for 60%, annual growth of 10-30%, unavoidable need. Supply side: Reserves only sufficient for 25 years, 71% are by-product minerals, new mines require 5-10 years.
Result: Demand soars, supply cannot keep pace, products are short every year.
Three catalysts activate simultaneously.
Time: Effective from January 1, 2026. Policy: Silver exports require government license, similar to rare earth restrictions.
China’s position: Refined silver exports account for 60-70% of the global total. Raw extracted silver is sent to China for refining, then exported as pure silver.
Impact: The licensing period is long and quite difficult, export quantity decreases by 7-10%. The U.S. and Europe cannot obtain refined silver, supply panic ensues, prices soar.
Time: Late 2025. Policy: Trump signs a presidential order to include silver in the list of key strategic minerals, ensuring supply security in the U.S.
The list also includes: rare earths, uranium, tungsten, nickel, cobalt. Historical pattern: minerals included in the strategic list have experienced dramatic increases in the past.
Corporate reaction: U.S. companies fear a drastic price increase, are stockpiling and buying in large quantities to avoid shortages.
Silver is a multifaceted precious metal: it is both an industrial metal and a safe-haven asset.
Global risk in early 2026: China-U.S. trade war, mutual tariffs, supply chain disruptions, Middle East tension, threat of tariffs from Europe and Canada.
Safe-haven logic: Capital tends to buy physical assets like gold and silver. Gold rises to $5600, silver to $119.
Three catalysts combined: China’s export restrictions + frenzied U.S. stockpiling + geopolitical safe haven = extreme market shortage, rising prices.
First, see if the price is reasonable.
Silver mining cost: Pan American Silver: $15.75 to $18.25/ounce.
Hecla Mining: $15 to $16.25/ounce.
Industry average: $15 to $20/ounce.
Comparison with gold: Gold mining cost $1400, market price $5600, approximately 4 times. Silver mining cost $20, market price $119, approximately 6 times.
Anomaly: Silver’s multiple is greater than gold’s multiple. Under normal conditions, silver’s multiple should be lower than gold’s. The current high multiple indicates market overheating and speculative sentiment.