Silver prices have hit a recently significant milestone, reaching $51 per troy ounce, the highest level in over four decades. This increase represents an extraordinary increase of about 75% just in 2023 so far. Industrial demand coupled with geopolitical uncertainties make the case for silver the strongest of all. To compound this already raging trend has been a five-year run of sequential supply deficit, pouring gasoline on this already burning fire.
When economic instability looms, investors are more likely to turn to silver as a cheaper gold alternative, further adding to silver’s popularity as a safe haven investment. As economic instability looms, traders are shifting their focus to hard assets like silver, which provide a hedge against potential downturns. Relatedly, the iShares Silver Trust ETF (SLV) has rocketed 68% year-to-date. Such a steep increase is a reflection of sky-high investor confidence.
This extreme influx of capital into silver exchange-traded funds (ETFs) has driven demand to highs not seen since 2020. This massive volume indicates a new, strong trend in overall investor sentiment toward silver, with many investors looking to gold and silver as safe havens during increased market volatility.
“There’s just a lot of concern about the global economy, and when that happens, people turn to hard assets like silver,” said Michael DiRienzo, CEO of the Silver Institute. His comment really gets to the heart of what’s causing this silver rally today.
Even with all this bullish demand for silver, still one of the biggest problems is continuing flat-lined mining production. Supply is not keeping up with the ever-growing demand, deepening the market’s deep-seated deficit. Industry analysts believe the increased demand versus limited supply is a big reason why prices are rising. This confluence of circumstances is brewing a perfect storm for soaring costs.
Year-to-date, silver’s recent performance has outpaced that of gold, which gained about 51% so far this year. On top of that, silver and platinum are rapidly emerging as the investments of choice in tough economic times. This year, the overall safe-haven rally has spread to silver. With its unique combination of being both an industrial metal and a financial safeguard, many traders are now flocking to silver.
Going into 2023, analysts expect silver prices to soar. This increase has the potential to send the market into transformative, historic progress. Ewa Manthey stated, “Its dual role as an industrial metal and safe-haven asset has amplified the rally, making 2025 a historic year for silver.”
Marina Smirnova added, “Silver’s steady climb is turning into a breakout,” indicating that the momentum may continue into the coming months.