Silver’s Revenge: The Ratio Strikes Back

In Silver Worth $150–$170? we laid out the long-term structural case. In Gold and Silver Shine as the Fed Cuts Rates, we noted the conditions for a breakout. And in Why I’m Watching Silver Like a Hawk and Gold Like a Central Banker, we warned that the gold-to-silver ratio above 100 to 1 rarely lasts.

Today, the ratio has snapped back to 92. Silver is doing what it always does when ignored for too long, playing catch up.

Price Surges and Investor Whiplash

Silver averaged $28.41 in 2024 and has already pushed past $32 on average in 2025. The price has ranged from just under $30 to above $36, pushing investors to either cheer or sweat. Investment demand, after slumping, is charging back, up to 70 million ounces last year, with 134 million expected in 2025.

Still, it’s not all sunshine. Past buyers, burned by overhyped expectations, have been selling into rallies. But that pressure is easing, and fresh capital is stepping in. ETFs flipped from net sellers to modest buyers last year, reversing part of their two-year decline.

Plenty of Silver, Not Plenty to Go Around

Yes, there are over 6.4 billion ounces of silver above ground. But most of it sits idle, in coins, medallions, leased bars, and long-term hands. COMEX inventories hit a record 500 million ounces, but the truly available float is far smaller. Big numbers don’t equal big liquidity.

Solar Stays Hot, But Not Blazing

Fabrication demand reached 986 million ounces last year, thanks largely to solar, which consumed 206 million ounces, double its 2020 take. But growth is slowing. Too many panels, thinner margins, and looming silver-thrifty tech could limit expansion. Total fabrication demand is forecast to dip slightly in 2025.

Electronics ticked higher in 2024 but face softer consumer demand in 2025. Jewelry demand declined, buoyed only by Indian restocking. That too is expected to slip further this year as economic conditions tighten.

Supply Stretches But Can’t Sprint

Total supply hit 1.06 billion ounces last year and is projected to reach 1.09 billion in 2025. But that’s more trickle than flood. New mine output remains limited. Lead times are long, investment has been weak, and regulatory drag is real. Scrap is filling some of the gap, boosted by high prices and better recovery from electronics and industrial waste.

So What Now?

Silver is not exploding. It is grinding higher, exactly as we said it would. The ratio is reverting. Investment flows are turning. And the ceiling for mine supply isn’t going anywhere fast.

The market isn’t chasing silver yet. But it’s watching. And as history shows, when the move comes, it often comes fast.

Courtesy of Neptune Global

********