Is Silver the Smart Buy in 2025’s Volatile Market?
With silver trading far below gold, 2025 may be the ideal time to invest. Here’s why silver could shine this year.
Why Silver May Be the Sleeper Investment of 2025
Just a few months ago, investors were closely watching a curious race: would India’s stock market benchmark, the BSE Sensex, or gold hit ₹1 lakh first? On April 22, the yellow metal crossed the milestone, leaving equities in the dust. But amid the celebration around gold, silver quietly gained momentum—and it might just be the underdog poised to outperform.
As traditional markets absorb correction shocks and global uncertainties persist, many investors are revisiting the idea of precious metals—not just for their historic store-of-value status, but also for the fresh opportunities they now present. Among them, silver may offer an unexpected edge.
Why Silver’s Time Could Be Now
Over the past decade, a generation of investors has grown up during a relatively calm economic stretch. Global inflation was tame, interest rates were low, and geopolitical tensions were more muted. That calm, however, appears to be fading. Ongoing wars, shifting global alliances, and economic instability have made markets far less predictable.
In this changing climate, precious metals like silver are drawing renewed interest. Unlike gold, silver plays a dual role—it’s both a store of value and a key industrial metal used in solar panels, electric vehicles, and electronics. This gives it a unique edge during economic shifts, especially when green energy demand surges.
A Historical Pattern of Powerful Returns
Silver’s volatility can be nerve-wracking, but it’s also what gives it outsized potential. Historically, silver tends to lag gold in the early stages of a rally but eventually overtakes it in percentage gains. During the last commodity supercycle (2001–2011), gold climbed from $250 to $1,800, while silver jumped from $4 to $40—a tenfold increase.
This kind of movement often follows a period when silver is severely undervalued relative to gold. That’s measured by the gold-to-silver ratio—how many ounces of silver are needed to buy one ounce of gold. As of April 2025, the ratio sits above 105, far exceeding its historical average of around 60. The last time it crossed 100, silver staged a massive rally. Many analysts see this as a potential indicator of another surge.
What’s Fueling Silver’s Undervaluation?
Silver’s price isn’t just about investor sentiment. It’s heavily influenced by industrial demand. As the world races toward decarbonization, silver’s role in solar technology and electric vehicles becomes even more crucial. The Silver Institute reports that silver demand from the solar sector alone is expected to grow 15% annually through 2030.
Meanwhile, mining output has struggled to keep pace. With higher extraction costs and fewer new mines being developed, supply constraints could further boost prices. When you combine rising industrial use with increasing demand from cautious investors, silver’s undervaluation becomes harder to justify.
Are We Entering a Commodity Supercycle?
The term commodity supercycle refers to a prolonged period—often a decade or more—of rising commodity prices driven by fundamental economic shifts. Several analysts believe we could be entering such a phase now, fueled by geopolitical fragmentation, green energy demand, and ongoing inflationary pressure.
If that’s true, silver may be on the cusp of its strongest run in decades. Its ability to bridge both the industrial and investment worlds makes it uniquely positioned to benefit from this macroeconomic turn.
Should You Add Silver to Your Portfolio?
If you’re already holding gold, you might wonder whether silver adds real value to your diversification strategy. The answer depends on your risk tolerance. Silver is more volatile than gold—its price can swing two to three times more. But that volatility can also work in your favor during bull markets.
For long-term investors with a moderate-to-high risk appetite, allocating a portion of your portfolio to silver—especially when it’s historically undervalued—could be a strategic move. As always, let your broader asset allocation and financial goals guide your decision rather than short-term price movements.
Final Thoughts: Look Beyond the Headlines
In a year where headlines are dominated by gold’s record highs and market corrections, silver quietly stands as a compelling alternative. Its combination of industrial utility and investment demand, historical undervaluation, and alignment with long-term global trends makes it hard to ignore.
Whether we’re witnessing the start of a new commodity supercycle or simply a cyclical recovery, silver’s story is just beginning to unfold. Smart investors might want to take a second look—before the rest of the market catches on.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Please consult a certified investment advisor before making investment decisions.
source : The Economic Times