Silver recently recorded a new all-time high at $64 per ounce. While gold has continued to outperform the white metal as a store of value, Deutsche Welle examines why silver is once again gaining growing global importance.

What happened to silver prices in 2025?

Silver has experienced a powerful rally, with prices more than doubling from around $30 per ounce (€24.54) at the start of the year to a record high of $64.65 per ounce on December 12.

The metal was trading near $30 on COMEX, the commodities arm of the New York Mercantile Exchange (NYMEX), in January. It then moved within a $37–$40 range throughout the summer before decisively breaking higher in September.

The pace of gains accelerated thereafter, with the strongest advances recorded during the final three months of the year.

The roughly 110% rise since the start of the year marks a dramatic turnaround for silver, long viewed as gold’s “poor cousin,” as gold typically outperforms during bullish markets.

Despite warnings from some investors about the potential for a short-term price correction, sentiment toward silver remains broadly positive heading into next year.

Prior to 2025, silver spent most of the past decade trading between $15 and $25 per ounce, with occasional spikes above $30 during periods of speculative enthusiasm, but it failed to sustain lasting upside momentum.

Even at its previous peaks in 1980 and 2011, silver reached around $49 per ounce, well below gold’s rallies above $1,900 per ounce.

This year, however, gold has lagged silver in relative terms, rising by about 60% to roughly $4,340 per ounce, compared with silver’s more-than-doubling.

Silver’s break to record levels has been partly driven by a weaker US dollar and expectations of interest rate cuts by the Federal Reserve, which tend to enhance the appeal of precious metals as safe-haven assets.

More significant drivers, however, have played a decisive role, most notably tightening global supply as production struggles to keep pace with demand.

What challenges does silver production face?

Latin America, which accounts for more than half of global silver output, is facing declining production as mines age and reserves are depleted.

Mexico, responsible for around 25% of global supply, has recorded double-digit production declines in recent years.

One of the country’s largest mines, San Julian in northern Chihuahua state, is approaching the end of its operational life by 2027. The mine is a key asset for Fresnillo, but ore quality is deteriorating and reserves are being exhausted.

At the same time, Peru, Bolivia, and Chile, which together provide roughly one-third of global silver supply, are experiencing falling ore grades, making extraction more costly and less efficient.

These countries are also grappling with political instability and stricter mining regulations, which have discouraged fresh investment in the sector.

According to analysts at London-based GlobalData, silver production in Latin America is expected to stagnate or begin declining by the end of the decade unless new deposits are discovered or supportive policies are introduced.

Meanwhile, the silver market has been in a structural deficit for a fifth consecutive year, according to the Silver Institute.

The institute estimates that global demand will exceed supply by around 95 million ounces this year.

Why is demand for silver increasing?

Demand for silver is rising not only because it is viewed as a store of value, but also because it has become a critical component in modern technology and clean energy.

Its unique properties, including the highest electrical and thermal conductivity of any metal, make it indispensable for fast-growing global industries.

Solar panels, for example, rely on silver paste to conduct electricity, and as governments push toward renewable energy targets, demand from the solar sector is expected to rise sharply.

Electric vehicles require up to two-thirds more silver than internal combustion engine vehicles, as the metal is used in batteries, wiring, and charging infrastructure, reinforcing silver’s role in the future of green transportation.

Silver is also playing an increasingly important role in the digital economy. Artificial intelligence chips and data centers rely on silver to ensure highly efficient electrical circuits, where speed and reliability are critical.

Silver’s ability to handle large electrical loads helps maintain signal integrity and stable performance at scale, while its high thermal conductivity aids in dissipating intense heat generated by AI workloads.

Despite declining use in coins and bullion, other traditional applications such as jewelry, electronics, medical devices, and consumer goods remain strong.

The Silver Institute expects global industrial demand for silver to continue growing steadily over the next five years.

Oxford Economics said this month that silver demand from the automotive sector will grow at an annual rate of 3.4% through 2031, and that the metal will benefit from a projected 65% increase in US data center construction over the same period.

What is silver’s historical role as money?

For thousands of years, silver has been trusted as a medium of exchange and a store of value. Ancient civilizations used it in trade due to its rarity, durability, and divisibility.

Silver’s importance expanded after European colonizers discovered vast deposits in Latin America, helping it become a metal of everyday transactions.

Spanish pieces of eight, silver coins worth eight reales, became the world’s first global trading currency, circulating from the Americas to Europe and Asia.

In the 19th century, many countries, including the United States and the United Kingdom, pegged their currencies to both gold and silver. The term “pound sterling” originally referred to a pound of silver.

Silver lost its monetary role in the 20th century as countries abandoned the silver standard. Central banks retained gold, while silver was increasingly directed toward industrial uses.

Nevertheless, silver has preserved its reputation as a hedge against inflation and financial turmoil, a legacy rooted in its long history as everyday money.

Palladium prices rose during Wednesday’s trading, supported by technical buying across several precious metals, most notably silver, which reached record highs, amid ongoing uncertainty surrounding US Federal Reserve policy.

Daily movements in palladium prices are influenced by the same factors that drive the broader precious metals complex, primarily US interest rate expectations, the strength of the dollar, and overall risk appetite among investors.

Reuters reported that investors remained cautious ahead of key US employment data, as well as upcoming inflation figures, prompting profit-taking across metals markets following a strong rally throughout 2025. In this context, palladium posted modest gains, while platinum remained relatively stable.

These developments are particularly significant given that palladium, like gold and silver, is globally priced. Expectations of lower interest rates or a weaker dollar tend to support non-yielding assets, while heightened sensitivity to economic data often leads to short-term risk reduction in metals markets.

Reuters also noted that delays and gaps in US economic data collection, caused by the government shutdown, have further complicated the macroeconomic outlook, adding an additional layer of uncertainty for traders positioning their portfolios.

European policy reassessment of internal combustion engines has emerged as a key medium-term demand driver for palladium.

On December 16, signals emerged that the European Commission may soften its stance on banning new internal combustion engine vehicles by 2035. According to Reuters, the Commission is preparing to revise the current plan by allowing the continued sale of certain non-fully electric vehicles, under pressure from major member states and the automotive industry.

Under proposals cited by the agency, the emissions reduction target could be adjusted from 100% to 90% by 2035 compared with 2021 levels, potentially extending the lifespan of plug-in hybrids and range-extender vehicles.

In a separate report, Reuters said the European Commission is also considering compensation mechanisms that would permit continued sales of combustion-engine vehicles beyond 2035 through the use of alternative fuels or green steel accounting.

This policy shift is highly relevant for palladium price expectations, given its close link to internal combustion engines, where it is used in catalytic converters to reduce harmful emissions in gasoline vehicles. Any extension in the lifecycle of combustion and hybrid vehicles in Europe could slow the erosion of palladium’s core demand base.

Reuters quoted a commodities strategist at WisdomTree as saying that such a policy shift would likely support internal combustion vehicles, which rely on palladium and platinum.

On the supply side, palladium market balance remains in focus, particularly following updated guidance from Russia’s Norilsk Nickel, the world’s largest palladium producer.

According to recent estimates, the company expects the palladium market to be broadly balanced in 2025 when excluding investment demand, but to show a deficit of around 200,000 ounces when investment demand is included. For 2026, Norilsk expects a deficit of approximately 100,000 ounces even without investment demand.

These distinctions are critical, as palladium is a relatively small and concentrated market, meaning shifts in investment flows or ETF demand can materially alter supply-demand dynamics and price sentiment.

In this context, a report from the Indian Bullion and Jewellers Association noted that palladium has risen by around 25% since the start of the latest rally, alongside strong gains in silver and platinum, illustrating how momentum has spread across the precious metals complex.

On pricing, market data showed NYMEX palladium futures for December 2025 trading near $1,592.8 per ounce, with notable intraday gains. Spot and futures prices can diverge depending on liquidity, short-term supply availability, and financing conditions.

Looking ahead, palladium’s strong performance in 2025 has prompted analysts to reassess their outlook for 2026, with the market caught between two competing narratives: structural support from constrained supply and policy developments that could extend demand for combustion engines, versus long-term headwinds from the expansion of fully electric vehicles and substitution risks.

Consensus projections point to a wide price range in 2026, with average estimates clustering around $1,250–$1,300 per ounce, reflecting elevated uncertainty following this year’s sharp rally.

During US trading hours, March-delivery palladium futures rose by 3.5% to $1,714.5 per ounce as of 16:52 GMT.

Bitcoin posted a modest gain on Wednesday, trading above the $88,000 level after limited losses earlier in the week. However, gains remained capped amid continued outflows from US-listed exchange-traded funds (ETFs), alongside ongoing uncertainty over the Federal Reserve’s interest rate path, keeping investors cautious.

The world’s largest cryptocurrency rose 1.3% to $88,497 by 09:53 ET (14:53 GMT).

Bitcoin continued to move within a narrow range, struggling to regain momentum as weak risk appetite and a lack of fresh catalysts weighed on prices, even as broader financial markets remained relatively stable.

Bitcoin steadies amid ETF outflows and Fed caution

Pressure on Bitcoin intensified as outflows from US spot Bitcoin ETFs persisted. Data showed that these funds recorded net redemptions over recent sessions, extending a withdrawal trend that has raised concerns about waning institutional demand.

ETF outflows have removed one of the key sources of support that previously helped fuel Bitcoin’s rally earlier this year.

Cryptocurrency markets also took cues from US economic data, as investors reassessed monetary policy expectations following mixed signals from the labor market.

The latest US jobs data pointed to slower employment growth alongside a gradual rise in the unemployment rate, suggesting the labor market may be entering a cooling phase. However, the slowdown has not been pronounced enough to give the Federal Reserve a clear signal to accelerate interest rate cuts.

These developments have complicated expectations for the Fed’s next moves, as policymakers continue to balance signs of softening labor conditions against inflation that remains above target.

As a result, uncertainty has increased across markets regarding the timing and pace of any future rate cuts, a factor that has weighed on risk-sensitive assets, including cryptocurrencies.

Attention is now turning to US inflation data due for release on Thursday.

Cryptocurrency prices today: Limited moves among altcoins

Most major altcoins showed limited movement on Wednesday, reflecting the cautious market backdrop. Media reports also pointed to weak liquidity behind the subdued price action.

Ethereum, the world’s second-largest cryptocurrency, fell 1.2% to $2,957.16.

Meanwhile, XRP, the third-largest cryptocurrency globally, rose 1% to $1.94.

Oil prices rose by more than 2% on Wednesday after US President Donald Trump ordered a full blockade on all sanctioned oil tankers entering or leaving Venezuela, escalating geopolitical tensions at a time when concerns over global demand are mounting.

Brent crude futures climbed $1.41, or 2.4%, to $60.33 per barrel by 10:18 GMT, while US West Texas Intermediate crude futures rose $1.42, or 2.6%, to $56.69 per barrel.

Oil prices had settled in the previous session near five-year lows, amid progress in peace talks between Russia and Ukraine, as any potential agreement could lead to an easing of Western sanctions on Moscow, releasing additional supplies into a market already grappling with fragile global demand.

On Tuesday, Trump issued an order imposing a blockade on all sanctioned oil tankers entering and leaving Venezuela, adding that he now considers the country’s leadership a foreign terrorist organization.

Warren Patterson, oil analyst at ING, said: “The risks related to Russia are well known and largely priced in, but there are clear risks surrounding Venezuelan oil supply.”

Trump’s remarks came one week after the United States seized a sanctioned oil tanker off the coast of Venezuela.

It remains unclear how many vessels will be affected by the decision, how the United States will enforce the blockade on sanctioned ships, or whether Trump will deploy the US Coast Guard to intercept vessels, as was done last week. In recent months, the United States has deployed naval vessels in the region.

While many ships carrying Venezuelan oil are subject to sanctions, other vessels transporting the country’s crude, as well as oil from Iran and Russia, are not sanctioned. Tankers chartered by Chevron continue to ship Venezuelan crude to the United States under a license previously granted by Washington.

Muyu Xu, senior oil analyst at Kpler, said: “Venezuelan oil production accounts for about 1% of global output, but supplies are concentrated among a small group of buyers, mainly China’s independent refiners known as teapots, the United States, and Cuba.”

She added that China is the largest buyer of Venezuelan crude, accounting for around 4% of its total oil imports.

Prices also received additional support from a sharp decline in US oil inventories.

Data from the American Petroleum Institute, cited by market sources on Tuesday, showed that US crude stockpiles fell by 9.3 million barrels last week. If confirmed by the US Energy Information Administration data due later on Wednesday, the draw would be far larger than the 1.1 million-barrel decline expected by analysts polled by Reuters.