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Its dual identity as both an investment and an industrial asset could allow silver to outperform gold next year.

According to a report by Evrim Küçük from Ekonomim, silver reached peaks this year not seen since 2012. There is curiosity regarding which trends will drive the grey metal in 2025 and whether the price increases will continue. According to experts, silver has the potential to rise by 25 percent in the new year. However, it is advised to keep in mind that economic uncertainties could put pressure on industrial demand and slow down silver.

Due to the changing economic landscape after the pandemic and geopolitical tensions, silver exceeded 34 dollars per ounce in October, reaching its highest point of the year. However, Donald Trump's victory in the US presidential election just a few weeks later affected silver while boosting bond yields and the US dollar.

The white metal is currently at the 29.5 dollar level per ounce, just under 30 dollars, amid concerns over the expected 'hawkish stance' from the Fed next year. Despite declines on a weekly and monthly basis, this level represents a 25 percent increase compared to the beginning of the year.

Experts predict that silver could outperform gold in 2025, rising another 25 percent to reach 40 dollars.

Peter Krauth, author of the book The Great Silver Bull and editor of the Silver Stock Investor newsletter, expected silver to reach 35 dollars in 2024, which almost happened in the 4th quarter. Looking at 2025, he believes the grey metal will revisit this level in the first quarter and that 40 dollars or more will be possible later in the year.

Mind Money CEO Julia Khandoshko says, “Silver is expected to reach 35 dollars in the coming months due to supply shortages and increasing demand. A slight pullback to 30 dollars may be possible after that.” However, the expert predicts another significant rally after that, where silver could exceed 50 dollars. Nevertheless, both experts warn that investors should be cautious about broader economic trends affecting silver.

GOLD/SILVER RATIO MAY RETURN TO THE 75 LEVEL

Saxo Bank commodity strategist Ole Hansen is also bullish. In an article he wrote, he says: “Despite its strong performance in 2024, silver only reached a 12-year high, while gold reached an all-time record. Its dual role as both an investment and an industrial asset could allow silver to outperform gold next year.

We anticipate a possible decline in the gold-silver ratio, which is currently hovering around 87, and it will likely move toward the 75 level seen in early 2024. If this happens and gold reaches our estimate of 3,000 dollars per ounce, that would mean a 13 percent increase. If silver rises to 40 dollars per ounce, that would mean an increase of over 25 percent.

The grey metal has shaken off its weak performance that had been ongoing since 2021. After silver prices fell by 11.7 percent in dollar terms in 2021, they rose by only 2.8 percent in 2022 and declined by 0.7 percent last year. This year, its annual gain, which at one point exceeded 30 percent, is currently at the 25 percent level. Silver's rise this year has been driven by several common macroeconomic factors.

It received support from the rise of gold.

Demand for investment metals benefited from global tensions and economic shifts pushing investors toward safer assets.

The worsening geopolitical landscape created an appetite for buying.

It is receiving positive effects from the demand for gold.

Central banks are aggressively buying gold to move away from the US dollar and dollar-based assets such as bonds. This activity indirectly supports silver prices.

Rising concerns about global debt in the US have led investors to turn to precious metals to protect themselves against economic instability.

SUPPLY DEFICIT SUPPORTS ITS INDUSTRIAL IDENTITY

According to the Silver Institute, the silver market is preparing to experience a significant structural deficit for the fourth consecutive year. This supports silver, especially in terms of its industrial identity. Since silver is generally a byproduct of lead, zinc, copper, and gold mining, it is unlikely that higher prices will encourage a significant increase in production. This dynamic ensures that supply constraints continue to support the market.