By the end of December 2025, silver will have nearly reached $71 per ounce, up over 120% for the year. How many friends have already started kicking themselves, wishing they had known...
At the same time, gold was also strong, rising about 60%; Bitcoin was more dramatic, surging to 126000 in October before falling back, ending the year around 87000, and during times of high risk aversion, it didn't attract much capital.
So the question arises: why can silver outperform gold?
The first layer of reason is that the macro environment gives hard assets the green light.
In 2025, global monetary policy will shift to easing, with the Federal Reserve cutting interest rates multiple times, pushing real yields down and weakening the dollar. Remember this phrase: low real interest rates + inflation shadows still present = the most comfortable breeding ground for hard assets. In such an environment, gold acts like a traditional safe haven, so it's not surprising it rose from a low of 2600 to 4500.
But silver is powerful on the second level; it doesn’t just rely on safe-haven demand; it can also benefit from economic expansion. Gold is more like a store of value, while silver represents a store of value plus industrial necessity. So when the cycle comes, silver historically loves to do one thing, which is to amplify the precious metals market.
The fourth level, also the most critical first level, is industrial demand, which is the engine behind this wave of silver. In the current consumption of silver, industrial use is already approaching half and is still increasing.
Where does the biggest increment come from?
Solar energy + electrification + electric vehicles, an electric vehicle will use about 25 to 50 grams of silver, significantly more than a gasoline vehicle. Sales are growing in double digits, and with charging stations and fast charging equipment requiring large amounts of silver.
On the contrary, right now, the supply side cannot keep up. Much of the silver is a byproduct from mining base metals like copper and lead-zinc; you can’t just dig more silver whenever you want. The result is that in 2025, the global silver market will face a supply shortage for the fifth consecutive year. Demand is getting stronger, supply is slowing down, and it's strange that prices aren't rising.
On the fourth level, you might not have thought that defense spending is quietly consuming silver. Modern weapon systems, such as radar, guided electronics, drones, and secure communications, all rely on silver. What’s worse is that some military-grade silver is destroyed once used, making it nearly impossible to recycle. Military spending reached a new high in 2024, and it will continue to increase in 2025 due to the conflicts in Ukraine and the Middle East.
So can it continue to rise in 2026?
To be honest, most of the momentum is still there; electric vehicles, expanding the grid, renewable energy, and defense budgets have not shown obvious brakes; meanwhile, supply remains tight, and new mines not only have long cycles but recycling also cannot make up for the gap in 'military consumption.' If real yields remain low, gold may still be decent; as risk appetite rebounds, Bitcoin may have a rebound.