The Metal Poised for Outperformance as Industrial Demand Surges

Silver's industrial demand from green tech and tight supply, coupled with 80:1 gold-silver ratio versus 60:1 historical average, creates compelling investment case for 2025.
- Silver is emerging as a potentially superior investment to gold in 2025, driven by its dual role as both a precious metal and an industrial commodity with growing demand from green technologies.
- The current gold-to-silver ratio of approximately 80:1 (compared to a historical average of 60:1) suggests silver is significantly undervalued with potential for mean reversion.
- Industrial applications including solar panels, electric vehicles (twice the silver of conventional cars), 5G infrastructure, and medical uses are creating unprecedented demand while supply remains constrained.
- Recent corporate developments show strong performance in the silver sector, with companies reporting impressive financial results and exploration discoveries.
- Experts project a potential supply deficit reaching 100 million ounces annually by 2026, creating what many analysts describe as a "perfect storm" for price appreciation.
As 2025 unfolds, a significant shift is occurring in the precious metals market that savvy investors are beginning to recognize. While gold has traditionally captured the spotlight as the premier safe-haven asset, silver is quietly emerging as a potentially more lucrative investment opportunity. This transformation is being driven by a unique combination of factors: silver's dual role as both a precious metal and industrial commodity, growing industrial applications particularly in green technologies, and a historically high gold-to-silver ratio that suggests significant undervaluation.
The evidence for silver's potential outperformance is building across multiple fronts. Recent quarterly reports from established silver producers show strong financial performance, exploration companies are announcing high-grade discoveries, and prominent investors like Eric Sprott are increasing their positions in silver companies. All these developments point to what could be a transformative period for silver as both an investment and industrial metal.
Silver's Dual Identity
Precious Metal and Industrial Powerhouse
Unlike gold, which primarily serves as a store of value, silver boasts what industry experts call a dual identity as both a precious metal and an industrial workhorse. This dichotomy creates a unique investment proposition that combines the security of precious metals with the growth potential of industrial commodities. One of silver's most compelling attributes for retail investors is its accessibility compared to gold. At current prices, investors could purchase over 80 ounces of silver for the price of a single ounce of gold. This affordability makes silver the "people's precious metal," allowing broader participation in wealth preservation strategies that might otherwise be prohibitively expensive with gold.
Alex Ebkarian, COO of Allegiance Gold, highlights a fundamental advantage that gold doesn't possess. This industrial utility is increasingly becoming a key driver of silver's value proposition.
"Silver's extensive applications in green technologies, particularly solar panels and electric vehicles, have created unprecedented demand pressure"[1]
Kevin Shahnazari of FinlyWealth emphasized this point,
"Silver usually outperforms gold during economic expansion periods due to its industrial applications in technology and renewable energy."[3]
The statistics further strengthen this case: industrial consumption now accounts for over half of all silver demand, with renewable energy sectors driving significant growth. The expanding electric vehicle market alone requires substantial silver components, contributing to a supply-demand imbalance that industry experts believe could propel prices significantly higher.
Rick Rule of Sprott, a respected voice in resource investing, reinforces this view:
"Industrial demand has been becoming increasingly important for silver, especially due to its use in solar panels and electric vehicles."[4]
This technological application continues to outpace mining production, creating a widening deficit that could support higher prices.
Supply Constraints Adding Pressure
While demand for silver continues to grow, supply faces significant constraints. Unlike paper currencies that can be printed at will, silver is a finite resource. Current mining production has struggled to keep pace with growing demand, creating what investors describe as a "perfect storm" for price appreciation.
As technological innovation accelerates across renewable energy, electronics, and healthcare, silver's critical role ensures its value extends beyond mere speculation.
A primary driver behind silver's emerging investment case is the exponential growth in industrial applications, particularly in sectors aligned with the global transition to green energy and advanced technologies:
- Each solar panel requires approximately 20 grams of silver
- Electric vehicles use nearly twice the silver of conventional cars
- 5G infrastructure deployment demands significant silver components
- Medical applications continue to expand with silver's antimicrobial properties
Jennifer Ramirez, Commodities Director at Global Resource Capital, explains:
"We're witnessing unprecedented industrial demand for silver that shows no signs of slowing. Meanwhile, mining production remains stagnant, creating a supply deficit that could reach 100 million ounces annually by 2026."[2]
This growing supply-demand imbalance provides a solid fundamental foundation for potential price appreciation.
The Gold-to-Silver Ratio as a Value Indicator
One of the most compelling indicators for silver's potential undervaluation is the gold-to-silver ratio. This metric, which measures how many ounces of silver it takes to purchase one ounce of gold, currently hovers around 80:1, substantially higher than the historical average of 60:1.
This compressed ratio represents a potential coiled spring, suggesting significant upward potential as markets eventually correct this imbalance. Throughout history, periods of an elevated gold-to-silver ratio have often preceded substantial silver price increases as the ratio reverts toward its historical mean.
Marcus Davidson, Chief Strategist at Precious Metal Analytics,
"The current gold-silver ratio sitting at around 80:1 suggests silver is dramatically undervalued compared to its historical average of 60:1"[2]
While gold is traditionally viewed as the premier safe-haven asset during economic turbulence, silver often delivers superior returns during these periods. Financial analysts describe silver as gold on steroids" for its tendency to outperform gold during both economic uncertainty and expansion periods.
Corporate Activities Supporting the Silver Thesis
Recent developments in the silver mining sector provide tangible evidence of the metal's growing importance and investment potential.
- Silvercorp Metals, a Canadian mining company producing silver, gold, lead, and zinc, recently reported adjusted net income of $22.0 million ($0.10 per share) and cash flow from operations of $44.8 million for Q3 Fiscal 2025. The company mined 383,543 tonnes of ore and produced approximately 1.9 million ounces of silver during the quarter, while maintaining a strong cash position of $354.6 million.
- Vizsla Silver announced a new high-grade discovery at its Panuco project in Mexico, with hole AM-25-90 returning 897 g/t silver equivalent over 5.85 meters, including 2,256 g/t silver equivalent over 1.13 meters.
- Outcrop Silver & Gold Corporation recently closed a $7.5 million public offering with Eric Sprott acquiring 13,637,000 units for a total consideration of $3,000,140. This investment increased Sprott's ownership to approximately 20.6% of Outcrop Silver's outstanding shares on a non-diluted basis, demonstrating strong confidence in silver's prospects from one of the industry's most respected investors.
- Santacruz Silver presented robust Q4 2024 production of 4,710,013 silver equivalent ounces that included 1,761,686 ounces of silver and 23,357 tonnes of zinc. Their multi-mine approach spans Bolivia (Bolivar, Porco, and Caballo Blanco Group) and Mexico (Zimapan), providing diversified operational exposure. The company has demonstrated strong financial management, recently announcing a US$10 million initial payment to Glencore. Santacruz provides production growth with mines that are actively increasing silver output while maintaining financial discipline - key elements for success in capturing silver's upside potential as industrial demand continues to accelerate.
- Dolly Varden Silver has reported impressive drill results from their Homestake Silver deposit in British Columbia's Golden Triangle. Their 2024 drill program consisted of 69 holes totaling 31,726 meters, with the latest results showing significant gold and silver intercepts with a highlight 21.55 g/t Au and 27 g/t Ag over 8.72 meters, including 47.92 g/t Au and 58 g/t Ag over 3.74 meters. The company is already planning their fully-funded 2025 drill program to expand on these results.
- SilverCrest Metals has delivered exceptional operational results in Q4 2024 and for the full year at their Las Chispas Operation in Mexico. The company exceeded 2024 sales guidance with 10.50 million AgEq ounces sold, generating record annual revenue of $301.9 million—a 23% increase from 2023. For investors, SilverCrest's treasury assets increased by $88.3 million during 2024 to $193.4 million, positioning them well as they advance their announced transaction with Coeur Mining, which is expected to close in Q1 2025.
- The Nevada gold project offers investors a compelling open opportunity where Ridgeline Minerals announced promising drill results at their Swift gold project in Nevada, where they're operating under an exploration earn-in agreement with Nevada Gold Mines. Nevada Gold Mines as already spent over $10 million and must spend a total of $20 million by the end of 2026 to earn an initial 60% interest, with potential to increase to 75% through additional investments. A drill hole SW24-007 returned thick, continuous intervals of low-grade gold, including 2.9m grading 1.9 g/t Au within 24.7m grading 0.5 g/t Au. A substantial $5 million exploration budget for 2025 is approved to drill up to five deep core holes, as the companies continue vectoring towards the interpreted core of a higher-grade system.
- Endeavour Silver is making significant progress at their flagship Terronera Project in Jalisco, Mexico, which is now in final construction stages with wet commissioning anticipated to begin early in Q2 2025. They've reached several key milestones to produce over two tonnes of concentrate, completing tailings filter mechanical assembly, and mining and backfilling their first production stope. They've also built surface stockpiles totaling 40,000 tonnes of ore. As a mid-tier precious metals producer, Endeavour's Terronera mine is positioned to be a premier senior silver producer, complementing their existing operations in Mexico and portfolio of exploration projects across Mexico, Chile, and the United States.
The Investment Thesis for Silver
- Industrial Demand Growth: Position for significant demand increases from solar energy (20g per panel), electric vehicles (twice the silver of conventional cars), 5G technology, and medical applications, creating a substantial supply deficit projected to reach 100 million ounces annually by 2026.
- Valuation Opportunity: Take advantage of the current gold-to-silver ratio of 80:1, which is significantly higher than the historical average of 60:1, suggesting silver is undervalued relative to gold with potential mean reversion.
- Economic Insurance with Growth Potential: Benefit from silver's dual role as both inflation hedge and industrial metal, potentially delivering superior returns to gold during both economic turbulence (40-60% vs. 20% for gold) and expansion periods.
- Strategic Allocation: Consider a balanced approach with physical silver (long-term wealth preservation), mining equities (leverage to price increases), and ETFs (liquidity and convenience), with an approximate 70:30 gold-to-silver ratio for diversified precious metals exposure.
- Entry Point Accessibility: Utilize silver's accessibility advantage for retail investors, with approximately 80 ounces of silver currently available for the price of one ounce of gold, providing greater divisibility and flexibility in position sizing.
Silver's Multifaceted Investment Case
As we progress through 2025, silver appears poised at a potentially transformative juncture that merits serious investor consideration. Its unique position at the intersection of precious metal safe-haven status and industrial commodity growth driver creates a compelling investment case that differs fundamentally from gold.
The evidence supporting silver's investment potential spans multiple domains: the technical signal of an elevated gold-to-silver ratio suggesting undervaluation, the fundamental driver of accelerating industrial demand particularly in green technologies, and the financial performance of silver mining companies showing improving operational results. Additionally, strategic investments by industry veterans like Eric Sprott provide further validation of silver's emerging opportunity.
While gold maintains its crown in central bank reserves and as the premier safe-haven asset, silver's role in technological innovation ensures its value extends beyond mere speculation. For investors seeking both wealth preservation and growth potential, silver's current positioning offers a unique opportunity that combines the security of precious metals with the growth trajectory of industrial commodities essential to our technological future.
Silver's rising industrial demand from renewable energy and technology sectors, combined with tight supply and historical undervaluation versus gold, creates compelling investment opportunity in 2025.
Reference:
- World Day News (March 2025). Why Silver is Becoming a Better Investment Than Gold in 2025
- World Day News (March 2025). Why Wealthy Investors are Quietly Buying Silver Instead of Gold
- Wu, Sharon (Dec 2024). CBS News. Gold IRA vs. Silver IRA: Which Will be Better in 2025?
- Smirnova, Maria (Feb 2025). Sprott's Gold & Silver Forecast 2025
Analyst's Notes


