Can the Silver Rally Continue into the Year-End?

Silver prices surged nearly 62% year-to-date, reaching an all-time high of $54.49 by mid-October 2025. The white metal outpaced the year’s gold rally, and bullish forecasts suggest that silver might even reach $100 by 2030. Is silver becoming the new gold? Will this rally continue? Read on to discover strategies for trading silver.

What Could Fuel the Silver Rally?

Contrary to gold, which is considered the ultimate safe haven commodity, silver demand is largely driven by its industrial applications. Some factors that could continue to drive demand for silver include:

Industrial Applications

Silver is a great conductor of both thermal and electrical energy. High conductivity makes it a suitable element for electronics. So, a surge in demand for AI chips and data centres may support the demand for silver. Plus, the global focus on cleaner energy and net-zero emissions is intensifying. Renewable energy devices primarily use silver paste (60% to 80% silver). Solar applications alone make up 85% of silver paste demand. It is also an essential component for EV batteries. Regulations favouring green initiatives and institutional investment in the direction are considered positive signals for a surge in silver demand and prices.

Softening USD

The US dollar is negatively correlated to precious metals. A declining dollar makes precious metal purchases cheaper. Plus, when interest rates decline, the incentive for holding the greenback is lower, which also drives investors towards other assets. While the expectations of the Fed cutting interest rates and trade-related tensions weigh on the greenback, the silver market could potentially enjoy a demand surge. This could create opportunities in XAU/USD for traders.

Supply Deficit

The World Silver Survey 2025 by the Silver Institute revealed that the poor man’s gold is on track for a fifth consecutive year of supply deficit. Despite the mine supply on track to rise by 2% while demand declines by 1%, the silver market is expected to register a deficit of 3,700 tonnes in 2025. This supply deficit is likely to drive the XAU/USD up.

Keep an Eye on the Gold-to-Silver Ratio

The gold-to-silver ratio determines whether silver is undervalued relative to gold. In the last week of October 2025, the ratio stood at about 85:1. A value over 80 is considered a strong indicator of a potential rally.

Headwinds to Silver Prices

Silver experienced a price correction in the second half of October 2025. This is because investors engaged in profit-taking after a 9-month-long rally. Retail demand from India, one of the largest bullion buyers, also declines post-Diwali. These factors may induce volatility in the silver markets. In such times of uncertainty, traders often prefer trading silver via derivatives like contracts for difference (CFDs). These enable traders to speculate on both rising and falling silver prices.

Trading Silver Through Year-End 2025

Some strategies that can help trade silver are:

Capturing the Demand-Supply Imbalance

Keeping a close eye on reports regarding industrial offtake, particularly from the solar and EV sectors, can help determine the demand side dynamics. Updates on mine output, recycling growth and inventory levels can help traders speculate on the direction of price moves. Issues like the supply shortages highlight the risk of disruptions in the physical market. Strong silver demand, coupled with supply deficits, could support price appreciation. Also, monitor supply-chain stability. Any issues with sourcing, logistics or refining could affect prices.

Trading the Gold-Silver Ratio

Gold prices may surge under a deteriorating geopolitical environment, rising central bank demand and a weakening US dollar. This could fuel bullish sentiment for silver. An upward revision in the gold-to-silver ratio could indicate more upside for the white metal.

Dollar Interest Rate 

Pay attention to the strength of the US dollar and interest rate decisions by central banks, especially the Fed. These factors tend to heavily influence precious metals prices, especially those of gold and silver.

Technical Analysis

Incorporating technical indicators, such as moving averages (20-day and 50-day EMAs), Ichimoku Cloud and ADX, in your silver trading strategy can help you identify entry and exit points. Indicators, such as the Fibonacci retracements, RSI and Bollinger bands, can reveal support and resistance levels. You can also use candlestick patterns to identify short-term trends and potential consolidation periods.

Combining MACD with RSI is a popular technical analysis strategy. While MACD helps determine crossovers as points of entry/exit, RSI helps determine whether the market is overbought or oversold to confirm those signals.

Employ Robust Risk Management

Precious metal prices are volatile, and sharp corrections can occur. Utilise stop-loss orders to protect your capital. If using leverage with CFDs, exercise caution. Leverage amplifies both potential profits and potential losses. Open a demo account to test your strategies. Journaling your trade offers valuable insights to refine your strategy and determine the most suitable set-ups for meeting your financial goals.

Instead of focusing solely on trading silver, consider diversifying your holdings. Asset classes that are negatively correlated with silver, such as the USD, equities and bonds, can help. These spread your risk exposure.

To Sum Up

• Silver hit an all-time high and surged nearly 62% YTD by October 2025.
• Price growth was driven by the metal’s industrial applications.
• Demand surge from solar panels and electric vehicle (EV) batteries supported the price rally.
• A falling US dollar makes silver cheaper and more attractive.
• The market faces its fifth straight year of silver supply deficit, which also supports silver price.
• The price saw a correction due to profit-taking and lower Indian demand towards the end of October.
• A combination of technical and fundamental analysis can help traders make informed silver trading decisions.
• Risk management is crucial while trading silver.

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