Silver is having its moment. After spending nearly two years quietly accumulating gains while gold got all the headlines, the white metal has suddenly kicked into high gear. The performance gap between the two has widened dramatically, and some market watchers believe this signals the second phase of the commodity bull market is officially underway.

The numbers tell the story. Spot silver has rocketed over 85% in 2025, climbing from under $30 per ounce to over $54 through October. That's the kind of move that gets attention, and it's not happening in a vacuum.

Why Silver Is Surging

According to consultancy firm Metal Focus, as reported by Kitco, the rally is being driven by a combination of tight inventories, persistent investor flows, and a structural supply deficit that simply won't quit. The research firm sees silver reaching $60 next year, pointing to depleted stocks in London following a year of heavy withdrawals driven by Indian demand, ETF accumulation, and precautionary stockpiling in the United States.

Here's where it gets interesting. Silver occupies a unique position in the commodities world. It's both a traditional store of value—competing with gold as a safe-haven asset—and a critical industrial material, particularly in renewable energy technology. Its conductive properties remain unmatched for solar power generation, which creates demand dynamics that gold simply doesn't face.

The Solar Connection

Industrial demand rose to 689 million ounces in 2024, with photovoltaic applications accounting for 244 million ounces. That's up more than 150% from 2020. Solar capacity additions continue to rise globally, and the International Energy Agency expects 4,000 gigawatts of new installations from 2024 to 2030. That trajectory alone could lift silver demand by roughly 150 million ounces annually by decade's end.

Now, producers aren't sitting still. Metal Focus notes widespread "thrifting" initiatives and substitution efforts in response to high prices, as manufacturers attempt to reduce the amount of silver used in PV cells. But the firm expects these adjustments to take years to meaningfully impact demand.

Meanwhile, the Silver Institute projects a fifth consecutive annual supply deficit of roughly 95 million ounces. Even with weak demand for jewelry and silverware, the deficit remains wide enough to support elevated prices.

Supply Side Constraints

The supply picture offers little relief. More than 70% of mined silver comes as a byproduct of copper, lead, zinc, or gold production. That dynamic limits producers' ability to respond quickly to higher prices—you can't just spin up a silver mine when prices spike. Metal Focus also warns that several mines are scheduled to close by 2030, potentially tightening output further.

This is the kind of supply-demand mismatch that can sustain a rally for years, not months. You have structurally increasing demand from solar applications, limited ability to increase supply in the short term, and depleted inventories that need rebuilding. Add in investor flows chasing momentum, and you have a compelling fundamental story.

What the Charts Say

While silver's multi-decade price chart has formed arguably the largest cup-and-handle pattern in history, short-term patterns are equally intriguing. After printing an all-time high of $54.49, silver's pullback and subsequent rally have also formed a cup-and-handle pattern on a shorter timeframe.

Per traditional technical analysis, a price target upon the break of the rim equals the vertical height of the "cup." This suggests silver may have more room to run before 2025 is over. The technical setup aligns with the fundamental picture, which is always a compelling combination for traders.

iShares Silver Trust (SLV) is up 83.82% year-to-date, offering investors liquid exposure to silver price movements without the hassle of storing physical metal.

Whether this rally has legs into 2026 will depend on how quickly producers can adapt to reduce silver usage in solar applications and whether new supply comes online faster than expected. But with five consecutive years of deficits already in the books and solar installations accelerating globally, the path of least resistance for silver prices appears to be higher.