While gold stole headlines in 2025, it was silver that delivered the knockout performance. The white metal surged close to 100% during the year, outperforming most asset classes globally. Axis Mutual Fund’s outlook attributes the rally to a “rare and powerful convergence” of industrial demand, supply shortages, and investor flows—creating one of the biggest silver bull cycles in recent memory.
“With silver currently trading at $58 per troy ounce*, valuations look stretched. However, there are no signs of retreat,” said Axis MF in a note.
Here are the key performance drivers:
Industrial Demand
Silver is unique among precious metals because of its heavy industrial use. Over 50% of global silver demand now comes from industries tied to high-growth sectors, including:
-
solar photovoltaic (PV) panels, -
electric vehicle (EV) batteries, -
semiconductors, -
5G infrastructure, -
automation technologies.
With the global green-energy transition accelerating, industrial appetite for silver rose sharply in 2025.
“Silver prices surged to fresh highs in 2025, aided by broader momentum in metals. Price of the white metal was supported by higher levels for copper, reflecting industrial demand crossover. Gains in gold also provided additional tailwinds,” said Axis MF.
A Deepening Supply Deficit
Silver’s supply side is structurally constrained. The metal is mostly mined as a by-product of copper, lead, and zinc mining, making its production relatively inelastic. This contributed to a fifth straight year of supply deficits, with recent deficits approaching 200–300 million ounces, according to the report’s charts.
The deficit widened further in 2025 as industrial consumption outpaced mining output and recycling volumes.
Shifts in flow:
Investors rotating from equities into commodities added to the silver’s price momentum.
• Structural shortage
Silver supply remains inelastic amid rising prices as majority of mined silver is produced as a by-product of lead, zinc and copper mining. 2025 marks the fifth consecutive year where global silver supply lagged the demand, leading to market deficit.
ETF and Physical Investment Boost Prices
Silver-backed ETFs saw meaningful inflows, complementing strong physical demand. While bar-and-coin buying was moderate relative to gold, it was steady enough to keep market conditions tight.
The report also notes that institutional investors rotated into commodities—including silver—as global rate expectations shifted and uncertainty loomed. What can you expect in 2026?
“As we enter 2026, investors should be mindful of potential risks. Overvaluation on leading to any weakness in physical demand, potential ETF outflows, profit taking could weigh on the prices. Additionally, stronger US Dollar, rising real yields, easing geopolitical tensions, any downturn in copper prices and rota on into energy or agricultural commodities could also lead to downward pressure. Central Banks’ preference for gold over silver may limit its official demand support. Possible substitution in industrial uses also poses a risk.
Overall, our outlook for silver is constructive with multiple tailwinds sustaining its rally even as valuations stretch. However, 2026 may bring corrections and volatlity as investors reassess valuations. 2025 has cemented silver’s position on both as a precious and industrial metal of choice, positioning the white metal as a standout asset in diversified portfolios,” said the report.
