Silver Hits Record $72.70, Best Year Since 1979
Silver surged above $70 for the first time, up 140% in 2025, outpacing gold as rate cuts and geopolitical tensions fuel a historic precious metals rally.
Silver crossed $70 for the first time this week.
Spot silver hit an all-time high of $72.70 per ounce on Tuesday before easing slightly as traders locked in profits during holiday-thinned trade. The metal has now more than doubled in 2025, gaining over 140%—its strongest annual performance since 1979.
Gold has followed, rising about 70% this year, but silver's outperformance reflects its unique position straddling monetary and industrial demand.
The Drivers
Three forces converged to push silver to records.
First, the Federal Reserve. The December rate cut to 3.5%-3.75% was the third reduction this year, and markets expect at least one or two more in 2026. Lower rates reduce the opportunity cost of holding non-yielding assets like precious metals.
Second, geopolitics. Escalating tensions across multiple regions have driven safe-haven flows into gold and silver. When uncertainty rises, investors historically rotate into hard assets.
Third, industrial demand. Silver's use in solar panels, medical equipment, and electronics has grown alongside the clean energy transition and AI infrastructure buildout. Unlike gold, which sits primarily in vaults, silver gets consumed in manufacturing.
Momentum Mechanics
The rally has textbook momentum characteristics. Silver's relative strength index has been in overbought territory since August on both weekly and daily timeframes. Rather than signaling exhaustion, this persistent strength reflects sustained institutional buying.
When RSI stays above 70 in a strong uptrend, the bulk of gains often happen during that stretch. That's exactly what played out here—the majority of 2025's rally occurred with the oscillator flashing "overbought."
Institutional Behavior
The scale of institutional participation in this rally defies typical seasonal patterns. Year-end is usually a period of position squaring and reduced activity. Instead, money managers have been accumulating exposure aggressively.
Part of this reflects capitulation. Funds that missed the initial move are chasing performance, adding fuel to an already strong trend. Part reflects genuine conviction that the macro setup—falling rates, elevated uncertainty, rising industrial demand—justifies higher prices.
The Gold-Silver Ratio
Silver's outperformance has compressed the gold-silver ratio, which measures how many ounces of silver it takes to buy one ounce of gold. The ratio has fallen from historical averages around 60-80 to the mid-30s.
Some analysts argue the ratio could fall further if silver's industrial demand continues growing while gold remains primarily a monetary asset. Others see the compression as a sign that silver is overextended relative to its yellow counterpart.
Where Analysts See Prices Going
Forecasts have ratcheted higher throughout the year. Several analysts now project gold reaching $5,000 and silver testing $100 by mid-2026 if current trends persist.
Those targets assume continued central bank buying, no resolution to major geopolitical conflicts, and sustained industrial demand growth. Any of those assumptions could break down.
But for now, the trend is up. Silver's 140% gain in 2025 puts it among the best-performing major assets globally. And the momentum shows few signs of fading heading into the new year.
What Traders Are Watching
Key levels to monitor: $70 has become psychological support after being broken. The next round number targets are $75 and eventually $100.
On the downside, a break below $65 would suggest the rally is losing steam. Thin holiday liquidity means either direction could see amplified moves in the coming days.
For traders positioned long, the setup remains favorable—but after a 140% run, the easy money has been made.