Why Silver price is surging even more than Gold?

The price of Silver has reached the $75 per ounce barrier for the first time on Friday, December 28, capping a year of staggering gains.

This increase in price has dramatically outperformed its more illustrious cousin, Gold.

While both precious metals have shown a record high price increase, Silver’s 161% year-to-date rally has dwarfed Gold’s 72% ascent.

This urged analysts to investigate the unique forces fuelling the white metal’s meteoric rise.

The simultaneous rally in precious metals is broadly underpinned by expectations of Federal Reserve interest rate cuts in 2026, a weakening U.S. dollar, and geopolitical tensions driving safe-haven demand.

But, experts suggest a confluence of factors specific to silver that explain its explosive outperformance.

The dual-thrust engine: Industrial demand meets financial investment

Silver has a powerful dual potential unlike gold which is primarily a monetary and safe-haven asset. This characteristic is currently playing a fundamental role in increasing the price.

Silver is a major component in the global energy transition and technological revolution. Its unparalleled conductivity makes it highly important for:

• Solar power: Photovoltaic cells are a massive and growing source of demand.
• Artificial intelligence (AI): Data centers associated with electronics rely on Silver.
• Electronic Vehicles (EVs): EVs also use silver in their critical components such as power electronics inverters, circuitry (PCBs), charging ports, and battery management systems (BMS).

Additionally, Silver is benefitting from all the same macroeconomic drivers such as Gold i.e., anticipated rate cuts, inflation concerns, and central bank diversification, but with greater volatility,

Another factor is its lower price point per ounce which makes it accessible to a broader pool of retail investors, some of whom have been actively organizing in online forums.

Supply struggles and policy tailwinds

Compounding the demand surge are major supply-side constraints. Years of underinvestment in mining exploration have restricted new supply. Another important factor was silver’s designation as a U.S. critical mineral which also adds to its strategic importance, attracting additional policy and investment focus.

Price forecasts: Can the rally hold?

Looking ahead, the outlook remains bullish but divergent. Analysts suggest that factors like rising uncertainty and inflation can support higher prices in coming days.

Some experts also suggest $80 per ounce for Silver before year-end, while Gold’s next major target is seen near $4,686.

In short, Silver’s extraordinary surge is not just a side effect of Gold’s rally. Rather it’s the result of a rare alignment of a combination of factors including industrial consumption colliding with a powerful financial and safe-haven investment rush, all set against a backdrop of tight supply.

This dual engine thrust has positioned the ounce-humble industrial metal as the standout performer of the 2025 commodity boom.