What’s hot: Silver breaks $40oz and still rising

Key Takeaways

• Silver breaks $40/oz – First time since 2011, up 40% YTD versus gold’s 35%; sentiment boosted by this milestone.
• High gold beta – WisdomTree’s model shows silver rises 1.4% for every 1% gold increase; further upside forecast with gold at $3,850/oz by 2026.
• Supply deficits persist – Four straight years of deficits, with by-product mining limiting supply response and keeping inventories under pressure.
• Policy and tariff risks – 2025 tariff fears widened COMEX–London spreads; silver added to USGS draft Critical Minerals List, keeps markets attentive to tariff risk.

Silver punched through $40/oz for the first time since 2011 last week . The metal has risen more than 40% year to date, outpacing gold, which is also up a hefty 35%. Gold’s rally is notable in its own right, having reached a fresh record high of $3,58378/oz on 10 April 2025.
 

Silver is often seen as a leveraged play on gold. WisdomTree’s Silver Model indicates that, when controlling for inventories, industrial activity, and mining sector capex, the silver beta with respect to gold is 1.4. In other words, when gold rises 1%, silver tends to rise 1.4%, all else equal.
 

Investor positioning and market sentiment

 
Breaking the $40/oz psychological barrier is a milestone that may further boost sentiment and generate momentum. Futures market positioning does not appear stretched — net positioning is only slightly above the five-year average, having declined since May 2025 — suggesting the bull run could continue.

Figure 1: Silver future’s net speculative positioning

Source: WisdomTree, Bloomberg. August 2020 – August 2025. Historical performance is not an indication of future performance, and any investments may go down in value.

 
Investment in silver exchange-traded products (ETPs) has risen steadily since March 2025. Silver holdings in ETPs are now at their highest levels since 2022. Many investors who felt they missed the gold rally have turned to silver, given the close relationship between the two metals.
 

Figure 2: Silver in exchange-traded products

Persistent supply deficits

Silver remains in a supply deficit, where demand outstrips supply. This has been the case for four years (2021–2024), and 2025 is likely to close in yet another deficit. Demand is being met by above-ground inventories, creating upward price pressure as metal changes hands between holders and users.
A structural feature of silver supply makes deficits harder to resolve: nearly three-quarters of global mine supply is a by-product output from mining other metals (nickel, zinc, copper). This means a price rise in silver alone is not enough to drive new supply. Unless there is a broader recovery in base metals, the supply deficit cycle is likely to persist.

Figure 4: Supply, demand and balance

Source: WisdomTree, Metals Focus. Historical data: 2010 –2024. Forecast 2025. Forecasts are not an indicator of future performance and any investments are subject to risks and uncertainties
 

Tariff uncertainty and market distortions

As with many metals this year, silver has been affected by tariff uncertainty. At the start of 2025, fears that bullion would be tariffed in the U.S. drove a wide price differential between COMEX silver futures and spot London prices. In February 2025, this spread reached nearly $1/oz — the highest on record.
 
Traders responded by moving bullion from London vaults to New York. When the Trump Administration clarified in April that bullion would be excluded from tariffs, the price differential collapsed, and COMEX even traded at a discount to London spot for a time.
 
However, not all silver has returned to London, constraining liquidity in the OTC market. As of July 2025, London vaulted silver inventories were 9.4% higher than March 2025 (the low point), but still 9.1% below July 2024. Tighter liquidity was reflected in higher silver lease rates in July, with tariff concerns resurfacing after copper was tariffed. While there has been no statement about silver tariffs, market participants remain cautious about returning metal to London vaults.

Silver on the USGS Critical Minerals draft list

Adding to market concerns, the U.S. Geological Survey (USGS) added silver to its draft Critical Minerals List for the first time in 2025. The draft is open for 30 days of public comment.
 
This list is an authoritative reference for U.S. administrations on the importance of minerals. Inclusion of silver could sharpen government focus on the metal, raising speculation about whether it may be subject to a Section 232 investigation (a precursor to tariffs). Symbolically, inclusion also highlights silver’s role in industrial and electrical applications.
 
It is important to note that being on the Critical Minerals List does not mean the government will start stockpiling silver. Critical Minerals, by USGS definition, are essential to economic or national security and have vulnerable supply chains. Strategic Materials, by contrast, are a broader and older category tied to defence needs in wartime and are more likely to be stockpiled. We remain doubtful that silver will enter the strategic category.
 
Historically, U.S. silver stockpiling was more an administrative by-product of the Treasury abandoning silver coinage, with inventories passed to another department rather than released into the market.

According to the USGS, U.S. net import reliance for silver was 64% in 2024, down from 80% in 2020. While this represents progress, the figure remains high and could create pressure points for government trade intervention.

Conclusion: Silver’s bullish case

Silver’s rally is grounded in its close correlation and high beta with gold, and our models forecast further upside. Tariff uncertainty can distort markets, leading participants to hold back inventories, which amplifies upward price pressure. In a market already constrained by supply deficits, these dynamics reinforce the bullish case for silver.

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Originally Posted September 8, 2025 – What’s hot: Silver breaks $40oz and still rising