Silver prices have been hovering around $40 an ounce, marking the strongest level since 2011, per tradingeconomics. The silver market is expected to see a deficit for the fifth successive year in 2025, according to the Silver Institute.
Investors have continued pouring into silver-backed exchange-traded funds (ETFs), with holdings rising for the seventh straight month in August, per Bloomberg, as quoted on Yahoo Finance. This surge has reduced freely available stockpiles in London, creating sustained tightness in the market, the Bloomberg article indicated.
iShares Silver Trust SLV has gained about 37% this year, outperforming SPDR Gold Trust GLD, which has advanced about 33%.
Below, we highlight a few reasons that can drive silver up in 2025.
Industrial Usage & ESG Transition
Silver is often considered an industrial metal, too. About half of the metal’s total demand comes from industrial applications. The industrial demand for silver is rising, especially on the green energy front. Silver’s industrial demand rose 4% in 2024, per the Silver Institute.
Silver is used in solar power and electric vehicle applications. Hence, growth in the global solar PV industry, as well as new sources of demand for sensors used in IoT, are providing a boost to silver demand.
China’s solar boom also supported silver demand, with solar cell exports jumping over 70% in the first half of the year, mainly due to sturdy shipments to India, as quoted on tradingeconomics.com.
In the automotive industry, even with a slower rise in battery electric vehicle production, rising vehicle sophistication, the continued (though more gradual) electrification of powertrains, and sustained investment in supporting infrastructure will drive higher silver demand, per the Silver Institute.
The rollout of 5G globally is another positive for silver. The electronic components that enable 5G technology depend greatly on silver.
A Weaker Dollar in the Cards?
The Fed will likely cut interest rates in September after Chair Jerome Powell hinted at a reduction in his highly anticipated Jackson Hole speech. There are 99.4% chances (at the time of writing) of a 25-bp rate cut in September, per the CME FedWatch Tool. A softer labor market has probably led the Fed to walk this path.
If the Fed starts easing policy (albeit at a moderate pace), which could be the case ahead, given President Trump’s inclination for a lower rate and still-contained inflation rate amid tariffs, the U.S. dollar may lose strength.
Since silver is priced in the greenback, any slump in the U.S. dollar tends to buoy gold prices. Invesco DB US Dollar Index Bullish Fund UUP is off 7.2% this year (as of Sept. 2, 2025) and has lost 0.04% over the past month.
Higher Safe-Haven Demand
With continued trade tensions even after some deal-making, the safe-haven metal gold has remained in a sweet spot this year. Most recently, U.S.-India trade tensions spiked as India seems to be teaming up with Russia and China. Since silver is also considered a precious metal, it offers some safe-haven appeal, though not as great as gold.
ETFs in Focus
Apart from the largest ETF iShares Silver Trust SLV, investors can also bet on the likes of abrdn Physical Silver Shares ETF SIVR, and ProShares Ultra Silver (AGQ) to realize likely gains in silver.
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SPDR Gold Shares (GLD): ETF Research Reports Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports iShares Silver Trust (SLV): ETF Research Reports ProShares Ultra Silver (AGQ): ETF Research Reports abrdn Physical Silver Shares ETF (SIVR): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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