The latest silver-related news include: record deficits, panic in London and a tech boom bolstered by the metal. Let’s analyze point by point why humanity suddenly needed silver. Lots of silver.
In mid-October 2025, London traders began to receive desperate calls from India with a request to buy silver. But by that time, traders no longer had free liquidity for leasing. Almost all of the silver in the vaults was provided by the ETF. And in India, preparations were in full swing for the national holiday, during which the goddess Lakshmi was traditionally presented with gold jewelry. But not this time. Only one investment banker pointed to the ratio of gold to silver in April (then briefly reached 1:100) and advised buying silver. The Indian market followed the advice, and by the fall, the storage facilities of factories in India were rapidly empty. This synchronous collapse across two continents has become a painful but telling stress test for the asset, which was officially designated a “critical mineral” by the US a month later.
Facing this, the increase in the price of silver since the beginning of the year by 100%, overtaking gold (+60%), does not look like a speculative bubble, but a natural adjustment to the new reality. The market that has been in the shadow of gold for decades, is showing symptoms of rapid change.
Reasons for growth
For the fifth year in a row, the global silver market has recorded a structural deficit, the Silver Institute analyzed in its annual report. Last year, the imbalance was over 148 million ounces, and the total “shortage” from 2021 will exceed the expectations of 790-800 million ounces, which is comparable to the annual global production. Industrial appetite at the same time is more than 680 million ounces.
The October crisis was the perfect storm to expose that fragility. India’s Diwali holiday, fuelled by advice from financial bloggers about “undervalued” silver, sparked a rush of demand just as China, a key supplier, went into the holidays. Indian dealers, faced with a local shortage, rushed to London and found that the city’s famous storage facilities, where up to 200 million ounces of silver rotate daily (according to the London Precious Metals Market Association – LBMA), are practically empty. Most of the remaining silver was frozen in ETFs, which bought up about 95 million ounces in 2025 alone, according to the Silver Institute. London liquidity dried up, with silver rental rates soaring to 200%, making normal trading almost impossible. As one of the participants noted aptly, the market did not collapse, it simply ceased to exist for a while.
A double need: green energy and digital progress
More than 200 million ounces of silver were spent on the needs of solar energy last year, according to the Silver Institute. Analysts suggest that in 2025 this figure will grow to 250-260 million ounces, despite attempts to optimize metal consumption. The growing market for electric vehicles is accumulating 2-3 times more silver per car (25-50 grams) than cars with internal combustion engines, and is creating a demand of 90 million ounces already this year.
The development of AI is a significant demand driver. Neural network server clusters are more powerful and more complex than traditional data centers, and they require 2-3 times more silver to work. In addition, the global chip packaging industry consumes more than 40 million ounces (data from the Shanghai Metal Exchange), the figure seems abstract, but this is 25-30% of the annual structural deficit of the entire market. Breakthroughs in new technologies around AI, especially against the backdrop of import substitution policies in China and the United States, are an inexhaustible source of silver demand. Unlike gold, which settles in storage, industrial silver almost completely “burns out,” irrevocably being withdrawn from circulation.
Supply has not kept pace, production is growing by less than 1% per year, according to the Shanghai metal market, and processing, although it breaks records, cannot yet compensate for the deficit.
GSR ratio
The investment appeal of silver is becoming more obvious to many analysts. And the first thing that catches your eye is the ratio of gold and silver prices (GSR).
With a gold price of $4237 and silver of about $58 (at the time of this writing), the ratio is 73:1. To understand the full extent of the disproportion, I will give the historical context. In recent centuries, the average ratio has fluctuated around 40: 1-50: 1. On the eve of World War I, in 1914, it was approximately 37:1. In the midst of the panic of 2020, analysts recorded short-term indicators of 100:1, a similar jump occurred in the spring of 2025.
While the West is discussing investment flows in ETFs, silver storage facilities in China have already been empty by 80% since 2020, Bloomberg calculated. Although China has long been the largest producer of silver, it has been rapidly becoming its net consumer in recent years. Record exports to London in 2025 were not a sign of excess, but a necessary measure to cover the acute liquidity deficit in the West. The most important course towards technological sovereignty, enshrined at the level of the authorities, is taking place inside the country. The policy of import substitution in microelectronics, supported by directives like “Guiding Opinions on Financial Support for New Industrialization,” is stimulating explosive demand for silver for semiconductor packaging and AI chip manufacturing. With traditional Chinese at this rate, more than 40% of silver will flock to new technologies this year. Therefore, China no longer plans to supply external buyers with surplus metal, it needs them more for the domestic market and its own industrial revolution. And silver buyers from China have to face new disruptions in global supply chains.
Metal, which could previously be used to smooth out deficits or futures supplies, is now unavailable. Which led to increased volatility and raised the risk of another repeat failure if a temporary surge in demand in India brought down liquidity in London. Silver is no longer just a commodity, becoming an asset whose physical availability is becoming an increasingly scarce and valuable resource.
Conclusion: no longer a shadow
The October 2025 crisis proved that the silver market is not a liquid multi-lane highway, but a narrow road where a sudden flow of demand creates a catastrophic congestion.
The forecast of the price of silver, even with obvious data, does not seem simple. Its market is smaller and less liquid than gold. Central banks, which systematically accumulate reserves, are not drawn to it. Short-term fluctuations in investment flows can cause sharp corrections. The recovery of liquidity in London and the change in industrial consumption influence price volatility. However, it is this volatility that is simultaneously its potential. Investors tend to perceive silver as a defensive asset in turbulent times, and the development of new technologies needs this metal. At the same time, both factors work simultaneously in the current macroeconomic and geopolitical configuration.
Therefore, silver is no longer a dark horse, it can become one of the main contenders for the title of metal of the next decade. Its fate will be determined not at meetings in central banks and investment houses, like gold, but at solar panel factories, AI corporations and laboratories that create next-generation chips.
At the same time, the shortage of silver is not a temporary problem, but a structural reality of the next decade. And if the growth of gold is based on fear during the period of loss of confidence in the dollar system, then silver with its double demand driver is also a necessary metal for building a technological future.
By Aliya Shamilova, architect of financial solutions