If you are looking for the next big investment opportunity, look no further than silver! As head further into 2025, the grey precious metal is looking like a fantastic opportunity. The price of silver in 2025 is currently trading around $31.00 an ounce, but don’t be shocked if it’s much higher by the end of the year.
There are three big reasons why the price of silver in 2025 could soar.
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1. Key Valuation Measure Screams “Silver Is Undervalued”
Take a look at the gold-to-silver ratio. It is a super important metric that investors use to figure out how these two precious metals stack up against each other. In the most basic terms, this ratio tells us how many ounces of silver it takes to buy an ounce of gold.
Chart Courtesy of StockCharts.com
If you start looking at the long-term averages, you’ll find that whenever this ratio hits above 80, silver is considered undervalued. Here’s the kicker: whenever this ratio reaches 80 or goes above that level, it almost always comes back down. In some cases, it makes a run down all the way below 40.
Assuming the gold-to-silver ratio makes a run to 40, and gold prices remain the same as now, at around $2,750, it would mean that the price of silver in 2025 could spike as high as $68.75. That’s 120% above the current price!
2. Robust Investment Demand for Silver
Next up, let’s look at the demand for silver. It’s been pretty robust, to say the least.
How can you tell?
Take a look at sales at major mints around the world. The U.S. Mint, for instance, sold 24.8 million ounces of silver in American Eagle coins. This figure was 24.7 million ounces in 202, and 16 million ounces in 2022. (Source: “Bullion Sales,” U.S. Mint, last accessed January 22, 2025.)
But, it’s not just the U.S. Mint selling huge amounts of silver. The Perth Mint, the biggest mint in Australia, sold 9.81 million ounces of silver in 2024. (Source: “Gold and Silver Bullion Sales Decline at Australia’s Perth Mint in 2024,” Mintnews, January 20, 2025.)
Mint sales are basically suggesting that the investment demand for silver is strong and that buyers aren’t too worried about the price—they just wanted it at any cost.
For silver bulls, this is nothing but good news! It makes the case for the price of silver in 2025 going higher much stronger.
3. Silver Supply Side Continues to Struggle
Lastly, while the demand side of the silver market is strong, the supply side of things isn’t keeping up.
You see, global silver mine output has been flat, not showing any significant signs of growth, or event declining in recent years. Rising production costs and other operational challenges are making it tough for miners to produce more silver.
For some perspective, consider this: according to World Silver Survey 2024 by the Silver Institute and Metals Focus, global silver mine production in 2024 is expected to be 823.5 million ounces. That’s down from 830.5 million ounces in 2023 and 836.7 million ounces in 2022. (Source: “World Silver Survey 2024,” The Silver Institute, last accessed January 22, 2025.)
It’s economics 101: strong demand and tight supply create a perfect storm situation in the silver market, so this could cause the price of silver in 2025 to skyrocket.
Price of Silver in 2025
Dear reader, putting it all together, the case for owning silver in 2025 seems pretty strong.
Personally, I will not be shocked if the price of silver makes a strong run towards $50.00 an ounce in 2025. Obviously, time will tell us more, but the fundamentals are favorable at the moment.
So, as the outlook for the price of silver in 2025 gets better, it might be time to starting paying extra attention to silver mining stocks. Over the past few years, miners have been relatively ignored. If the silver prices surge, miners will double, triple, or more in value.
