Silver Outperforms Gold as Prices Hit Record Highs

Gold may be glittering, but it’s silver that’s truly shining in 2025. The white metal has delivered one of its strongest rallies in decades, supported by booming industrial demand and a tight global supply. Silver, which began the year at $28.92 an ounce, touched a record high of $49.57 on October 8, marking a spectacular rise of nearly 69%.

In comparison, gold has climbed around 56%, making silver the standout performer in the precious metals market. Analysts say that the surge in demand from renewable energy, electronics, and electric vehicles — combined with a prolonged supply deficit — has set the stage for silver’s remarkable run.

Industrial Demand Fuels the Rally

Silver holds a unique position as both a precious and industrial metal, and that dual role has been central to its current rally. More than 60% of global silver demand comes from industrial uses, particularly in solar panels, electric vehicle batteries, and electronics.

According to the Tata Mutual Fund Silver Outlook (October 2025), “Rising investment and industrial demand along with recovery expectations in China are positively influencing silver prices.”

With countries accelerating their clean energy and decarbonisation goals, silver’s use in solar and green technologies continues to expand rapidly. This ongoing industrial consumption has strengthened the metal’s fundamentals, giving it an edge over gold.

Also Read: India Takes the Lead in Global Digital Transformation

Fed Rate Cuts and Dollar Weakness Add Momentum

Monetary policy changes in the United States have also helped push silver higher. The US Federal Reserve’s 25 basis-point rate cut on September 17 triggered another wave of buying, as investors anticipated a weaker dollar.

As the report highlights, “The expectation is that the US Fed may cut rates by 25 bps again in the October meeting if the labour market continues to show weakness.”

Historically, Fed rate cuts tend to weaken the US dollar, making dollar-denominated commodities like silver more attractive to global investors. The softer dollar has therefore amplified the rally in silver prices this year.

Fifth Year of Supply Deficit Tightens the Market

Adding fuel to the rally is a persistent supply shortfall. The silver market is now entering its fifth consecutive year of deficit, meaning demand has outpaced global mine output.

The report points out, “Continuous fifth year for supply deficit of silver is a big boost for overall market sentiment.” This imbalance between consumption and production has tightened supplies, creating a strong price floor for the medium term.

In India, where over 90% of silver demand is met through imports, a weaker rupee has made silver more expensive domestically, further reinforcing its perceived value.

Silver’s Outperformance Over Gold

Another key indicator of silver’s strength is the falling gold-silver ratio, which measures how many ounces of silver equal the price of one ounce of gold. The ratio breached the 85 mark in September and slipped toward 81, signalling silver’s growing dominance.

Analysts expect this ratio to decline further towards 75, suggesting silver could continue to outperform gold.

The Tata Mutual Fund Silver Outlook adds, “We believe strong investment demand, large silver supply deficit and Fed cuts may continue to support silver prices over the medium to long term for a three to five-year horizon.”

Cautious Optimism Ahead

While silver’s long-term outlook remains strong, experts also warn of short-term volatility due to its dual nature — sensitive to both economic growth and monetary policy changes.

Still, with industrial demand booming, supply constraints deepening, and favourable monetary conditions, silver appears well-positioned to outshine gold in the years ahead.

As the white metal enters its fifth year of deficit, it may continue to glitter brighter than gold — at least for now.

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