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Silver’s Shiny Surge: The Fundamentals Behind the Rally

Silver isn’t just about jewellery, coins, or your grandmother’s tea set anymore. In 2025, it has become one of the hottest commodities in the financial markets, rallying sharply and capturing global headlines. But unlike many speculative fads, this rally is built on a strong foundation.


At CLiK Trading Education, we believe in cutting through noise and focusing on evidence-based fundamentals. Here’s what academic research, leading financial publications, and institutional studies tell us about why silver is shining so brightly.


Three men in suits and hard hats in a cave, discussing silver trading strategies. Text: “DON’T DIG FOR SILVER… TRADE IT SMART.”
Forget digging for silver… 📉⚒️ Smart traders dig into fundamentals, manage risk, and trade with a plan.

Silver’s Dual Identity: Money and Metal


Silver is unique. Unlike gold, which is primarily a monetary asset, silver serves two masters:

  • As a monetary asset, it moves with interest rates, inflation expectations, and safe-haven demand.

  • As an industrial metal, it powers solar panels, electronics, electric vehicles, and the green-energy transition.


Research highlights this dual nature:

  • Goldmoney’s Silver Price Framework shows silver’s value is shaped by both monetary demand and industrial utility .

  • The Silver Institute confirms silver’s volatility and commodity linkages, while also noting its long-run co-movement with gold .


This hybrid role makes silver highly sensitive to both financial flows and real-world industrial demand.


Macroeconomic Tailwinds


Falling Real Yields and Fed Policy

Silver thrives when real interest rates fall. Academic models show that rate hikes depress silver in the short run, while easing supports it:

  • Robinson et al. (2024) used a structural VAR model and found U.S. rate shocks negatively impact silver, while GDP/output shocks lift it .

  • CME Group research highlights silver’s negative correlation with interest rate expectations and the U.S. dollar .


With markets pricing in rate cuts in 2025, the macro backdrop has tilted in silver’s favour.


Dollar Weakness

Because silver is priced in dollars, a weaker greenback boosts global demand. Both econometric studies and institutional insights confirm this relationship.


Industrial Demand: The Green Revolution

Unlike gold, silver is a workhorse metal. Its industrial demand has surged as the world pivots to clean energy:


  • Solar Panels – Silver is a critical component of photovoltaic cells.

  • Electronics & EVs – Its conductivity makes it essential for high-tech manufacturing.

  • Industrial Output – Åström’s long-run regression study (1973–2011) found that industrial production is the single largest demand driver for silver .


With renewable energy scaling and tech demand accelerating, silver’s industrial pull has never been stronger.


Supply Constraints and Deficits

The supply side isn’t keeping up. Unlike gold, most silver is mined as a by-product of other metals (copper, lead, zinc), limiting the industry’s ability to scale output quickly.


  • HSBC forecasts a 2025 silver deficit of ~206 million ounces, up from ~167 million in 2024 .

  • The Silver Institute warns of structural tightness as demand consistently outpaces mine supply .


This means even modest increases in demand can drive large price moves.


Geopolitical & Safe-Haven Demand

From wars to trade disputes, geopolitical uncertainty has fuelled inflows into hard assets. While gold takes the spotlight, silver often follows — with larger percentage gains.

  • HSBC raised its silver forecasts on the back of geopolitical risks and gold’s gravitational pull .

  • Goldmoney and CME research both highlight silver’s safe-haven function in turbulent times .


Risks to Watch

Even with strong fundamentals, silver is volatile. Risks include:

  • A resurgent U.S. dollar or hawkish Fed surprises.

  • A global industrial slowdown, which could weaken demand.

  • Profit-taking and speculative flows, which exaggerate corrections.


Studies using GARCH volatility models show that silver’s open interest and liquidity structure amplify these swings .


Conclusion: The CLiK Takeaway

Silver’s rally in 2025 isn’t random. It’s backed by:

  • Monetary policy tailwinds (rate cuts, weak dollar).

  • Industrial demand growth (solar, EVs, electronics).

  • Tight supply and widening deficits.

  • Safe-haven flows amid geopolitical tension.


At CLiK Trading Education, we help traders cut through the noise and focus on what really matters: understanding the drivers behind the moves. Because successful trading isn’t about chasing headlines — it’s about process, discipline, and education.


👉 Ready to learn how to trade with fundamentals in mind?


Check out our upcoming courses at CLiK Trading Education and build your process-driven trading edge today.


References

  1. Goldmoney Research – The Silver Price Framework

  2. The Silver Institute – Factors That Determine the Silver Price (2024)

  3. Robinson et al. (2024) – Structural VAR Analysis of Silver and Macro Shocks, Springer

  4. CME Group (2024) – Gold & Silver: Major Factors That Could Impact Volatility

  5. Åström, Master’s Thesis (2011) – Determinants of Silver Prices (Regression analysis, 1973–2011)

  6. Reuters (2025) – HSBC Raises Silver Price Outlook on Gold Strength, Geopolitical Risks

  7. Jongadsayakul (2015) – Volatility of Silver Futures in Thailand: A GARCH Model, SSRN

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