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Precious metals, particularly gold and silver, have delivered impressive gains in 2024, thanks mainly to lower interest rates. The rally intensified in 2025 on strong safe-haven demand. Over the past one-year period, silver bullion exchange-traded fund iShares Silver Trust SLV and abrdn Physical Silver Shares ETF SIVR have surged over 34%, while both funds have jumped around 13% each so far this year. On the hand, gold bullion ETF SPDR Gold Trust GLD has gained 37.6% over the past one year and is up 12.2% in the year-to-date frame.
Silver ETFs at a One-Year High
Most silver-based ETFs have been hovering around a 52-week high currently. A declining interest rate environment has boosted demand for gold and silver, as these metals do not yield interest, making them more attractive than alternatives like bonds.
Both gold and silver serve as stores of wealth, often sought-after during periods of financial and political uncertainty. Their appeal tends to increase when other asset classes struggle, and geopolitical tensions caused by the ongoing trade tensions further enhance their attractiveness to investors.
Why Is Silver Enjoying an Edge Over Gold This Year?
Silver continues to outperform gold this year due to its extensive use in key industrial applications. As the global economy strengthens, rising industrial and manufacturing demand is driving silver prices higher. Nearly half of the metal's total demand comes from industrial uses, while approximately 30% stems from jewelry, silverware, coins, and medals.
The resurgence in silver prices has been supported by short covering from tactical investors in the futures market, fueled by concerns over President Trump’s tariff policies and the resulting surge in futures and spot silver prices.
Silver Market in Deficit
The silver market is now on track for its fifth consecutive year of deficit in 2025. Although this year’s deficit is expected to decline by 19% to 149 Moz, it is still large historically, according to the Silver Institute.
Note that the global silver market was in a deficit in 2024, with the deficit narrowing to an estimated 182 million ounces, according to the Silver Institute. On the contrary, total gold supply also increased by 1% year-on-year, reaching a record high of 4,974 tonnes, driven by both mine production and recycling.
Bright Prospects
Going forward, uncertainty surrounding U.S. trade policy, and rising concerns over U.S. public debt are likely to boost investor interest in portfolio diversification, benefiting both silver and gold investments.