The Silver Bullet 📈

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They call silver the devil’s metal because it is notoriously volatile. For silver, sudden and sharp price swings without warning are the norm. It has made countless traders swim in fortune and has also drowned many in debt and bankruptcy.

And in 2025, it more than justified that reputation.

For decades, physical silver that normally sits unmoved in London vaults was suddenly wrapped, palletized, and flown across the Atlantic to the United States at the beginning of 2025. But what was more interesting than silver making its way to New York from its trading hub in London was the way it was transported. 

The silver was mostly flown!

Under normal circumstances, this makes no economic sense. Silver is heavy, dense, and of relatively low value per kilo. Air freight across the Atlantic erodes margins, which is why it is usually shipped by sea. 

But 2025 was anything but normal for global trade. 

Growing concern over potential U.S. tariffs and the risk of sudden changes to import rules has pushed traders to prioritise speed over cost. As a result, traders rushed the metal into the US before imports could become more expensive or operationally constrained.

This was just one episode in the silver saga that unfolded over the course of 2025 — a year in which prices surged to $83.90 per ounce, the highest level on record.

In this issue of CrossDock, we break down why silver went on to hit record prices in 2025. We examine the sudden spike in demand, the factors that triggered it, and how these disruptions reveal a much larger supply-chain problem.

To understand the current spike, we need to go back in time and revisit the previous peaks — and what triggered them. The first takes us to the early 1980s, 46 years ago. It’s not just the story of silver; it is a tale of three brothers and what they did, and how it all came crashing down on an otherwise ordinary Thursday, much like this one.

In 1974, when oil tycoon H. L. Hunt died, he left behind a vast fortune spread across his family. Two of his sons, Herbert and Nelson, channelled that oil wealth into the commodities markets.

The Hunt brothers were convinced that inflation would erode the value of currency and that silver — like its more expensive cousin, gold — would emerge as a financial safe haven.

To put their theory into action, the Hunt brothers set out to amass silver at scale — with the explicit goal of becoming the largest holders of the metal in the world.

What set the Hunts apart was what they did next.

Instead of settling their futures contracts in cash, as most traders do, the Hunts asked for physical delivery of the silver. They stored the metal and kept it off the market. As their physical holdings grew, they used their large cash reserves to buy even more futures contracts, allowing them to control increasing amounts of silver.

The end result? In 1979, silver prices surged. The price jumped from $6.08 per troy ounce on January 1, 1979, to a record $49.45 per troy ounce by January 18, 1980 — a rise of 713% in just over a year.

At their peak, the brothers were estimated to control nearly one-third of the world’s silver supply not held by governments. The squeeze on the rest of the market became so severe that, on March 26, 1980, jeweller Tiffany & Co. took nearly a full-page advertisement in The New York Times, condemning the Hunts’ actions.

And Uncle Sam took notice of this. 

The U.S. government became concerned over what it saw as a clear attempt at manipulating the nation's silver reserves. 

Federal commodities regulators responded by introducing special rules that prevented any new long-position contracts from being written or sold in silver futures.

What followed was swift and brutal. On March 27, 1980 — dubbed as Silver Thursday — the price of silver collapsed to $10.80 an ounce, bringing the long-running rally to a sudden and dramatic end. 

And for silver to peak again, it took the next three decades.

This time, a new set of conditions emerged — different actors, different tools, but strikingly familiar pressures. Once again, confidence in paper money began to deteriorate.

In 2011, the world — and the United States — was still recovering from the aftershocks of the 2008 financial crisis. Confidence in financial institutions remained fragile, central banks were running ultra-loose monetary policy, and investors were searching for assets that could protect value in an uncertain environment.

That uncertainty deepened as the United States approached a bitter debt-ceiling standoff, raising fears of a technical default and a possible downgrade of the country’s sovereign credit rating.

Silver became a beneficiary of that moment.

The white metal was immediately seen as a safe place to park money and as a cheaper alternative to gold. Investors rushed in, pushing prices up quickly. Silver rose from about $17 an ounce earlier in the year to $49.21 by April 29, 2011.

But staying true to its moniker, the rally did not last. As traders pulled back and rules tightened, prices fell almost swiftly.

For nearly 45 years, silver stagnated below its all-time high of $49.95, a level set on January 17, 1980. But that changed on October 9, 2025, when silver prices finally broke through the long-standing ceiling, rising to nearly $53 an ounce, a whopping 78% increase since the beginning of the year.

So, what triggered this historic rise? Let’s break it down.

What unfolded in October wasn’t driven by a single event or decision. Silver didn’t surge because of a single headline, policy move, or random speculation. In fact, it rose because several forces came together at the same time — and once they did, the prices hit the roof. 

To be precise, it all started when President Trump decided to correct the trade imbalance of the US with his favourite word, tariffs

When President Trump announced his “Liberation Day” tariffs, gold prices jumped almost immediately. That reaction was straightforward: tariffs increase economic uncertainty, raise inflation risks, and revive fears around trade disruption. In moments like that, investors instinctively move toward gold, the market’s default safe haven.

But what does that have to do with silver?

To understand that link, you need to understand something called the gold–silver ratio.

The gold–silver ratio measures how many ounces of silver it takes to buy one ounce of gold. A low ratio means gold is relatively cheap compared to silver, while a high ratio means silver is undervalued and more likely to rise.

In April 2025, after gold surged on tariff fears, the ratio spiked to 100.8 — one of the highest levels seen in decades. This triggered a silver buying spree. 

The other factor that contributed significantly was the uncertainty surrounding silver. For example, gold and platinum were exempted from US tariffs after the Trump administration deemed them essential. Silver, however, was left in a grey zone. At the time, it was not included on the critical minerals list, creating uncertainty over whether it could face future trade restrictions.

The United States imports a significant share of its silver, with roughly 60%-65% of domestic demand met by foreign supply. Any tariff on it can trigger price increases and operational difficulties. 

As we mentioned earlier, physical silver already inside the United States stayed put, and to reduce future risk, additional silver was flown from London to New York. That shift tightened the global silver market — a strain that was further amplified when India, the world’s most populous country, entered its most important festival season.

This year, silver’s appeal in India coincided with Diwali. Seasonal buying of silver picked up sharply. On October 17, silver prices in India surged to a record 170,415 rupees per kilogram, an 85% increase since the start of the year.

Interestingly, India, however, relies heavily on overseas supply. Around 80% of its silver is imported. While the UAE and China have become increasingly important suppliers, the United Kingdom remains India’s largest traditional source, meaning a significant share of the silver flowing into India ultimately originates from already strained London’s vaults.

​​For decades, London has been the world’s primary hub for silver storage and settlement. The city hosts the London Bullion Market Association (LBMA), which sets global standards for “good delivery” silver bars and underpins much of the international spot market. Most large institutional trades in silver are cleared and settled in London, even if the metal itself never moves. As a result, vast quantities of physical silver have traditionally been stored in LBMA-approved vaults beneath the city. 

But in recent years, that physical cushion has been thinning.

London’s vaults have been emptying at a steady pace as silver has been pulled into other markets and end uses. In June 2022, LBMA vaults held 31,023 metric tonnes of silver. By March 2025, that figure had fallen to 22,126 metric tonnes — a decline of roughly one-third, and the lowest level in years.

Low inventories, plus hoarded silver vaults and Indian demand,d sent the silver price to a record high. 

But remember what we said earlier — silver is the devil’s metal. This sudden surge in prices created an attractive arbitrage opportunity. Traders who could move quickly began withdrawing silver from vaults in the United States and China and flying it back to London. 

As a result, silver holdings in London vaults jumped by the most in at least nine years. In October alone, London vaults added nearly 54 million troy ounces of silver — weighing more than 100 of the city’s iconic double-decker buses.

At this point, one might expect prices to fall as inventories in London vaults surged. But that did not happen. That is because, unlike gold, silver is not only a precious metal but also an industrial metal, and the world requires more than it produces. 

The modern world simply loves silver. It is the best conductor of electricity, the most reflective metal, and among the most malleable and ductile. These properties make it difficult to replace in modern technology, and as the world electrifies more, silver’s importance is only growing.

According to the Silver Institute, silver’s industrial demand rose 4% in 2024, reaching 680.5 million ounces — a record high for the fourth consecutive year. Today, solar panels, electric vehicles, artificial intelligence, robotics, and even next-generation solid-state batteries all rely heavily on silver. 

Take solar power as an example. Silver is used heavily in solar panels. Solar power is now the world’s leading source of green electricity. Faster growth in solar capacity and the wider adoption of new solar technologies increased demand for silver. As a result, silver use in solar panels reached a record 197.6 million ounces last year. 

At present, a standard electric vehicle contains roughly 25 grams of silver, while larger EVs can use up to 50 grams in their components. If the industry shifts toward solid-state silver batteries, each electric vehicle could require a kilogram or more of silver. 

Even everyday consumer electronics add up. A single iPhone contains only a fraction of a gram of silver, but with Apple shipping more than 230 million devices each year, those small amounts translate into meaningful industrial demand at scale.

Over the past eight years, industrial demand for silver has risen steadily, climbing from nearly 31,000 metric tonnes in 2016 to more than 36,000 metric tonnes in 2024.

But, sadly,  the supply side is not able to catch up with the demand.

According to the World Silver Survey 2025, the silver market is now in its fifth straight year of structural supply deficits, with inventories at multi-decade lows and refined supply under increasing pressure.

That is because silver has a mining problem.  Output has been constrained by declining ore grades, ageing mines, and a lack of new large-scale projects coming online.

The Silver Institute’s 2025′s World Silver Survey estimates that silver production has been decreasing over the past 10 years, especially in Central and South America.

In Mexico, the world’s largest silver producer, several mature mines are yielding less metal per tonne of ore than they did a decade ago, forcing operators to process more material at higher cost just to maintain output. New projects have also faced delays due to permitting challenges and tighter environmental scrutiny.

In Peru, production has been disrupted by a mix of regulatory uncertainty, community protests, and stricter environmental requirements. These factors have slowed expansions and discouraged fresh investment, even as demand for silver has continued to rise.

However, one of the biggest reasons silver supply grows so slowly is the way it is mined. Most silver is produced as a by-product of mining other metals such as copper, lead, and zinc. 

So why can’t miners simply find more silver and ramp up production and increase supply?

It is easier said than done. 

Silver deposits are difficult to discover, and even when they are found, building a mine takes years. Securing permits, meeting environmental requirements, and getting final approvals can delay production for a decade or more before any silver actually reaches the market.

So, how is the world reacting to this growing silver squeeze?

In November, the United States added silver to its list of critical minerals. That designation puts silver firmly on the federal government’s radar, elevating it from a market commodity to a material of strategic importance.

As a result, the focus is now shifting toward building domestic refining and processing capacity.

Let’s now look at China — one of the world’s largest producers, refiners, and consumers of silver.

China has begun treating silver the way it once treated rare earths. In late December, Beijing moved to tighten controls on silver exports. While China has not announced an outright export ban, the new rules place silver under the same regulatory framework as rare earths. 

The shift matters because China sits at the center of the silver ecosystem. 

In the first eleven months of the year alone, China exported more than 4,600 tonnes of silver, far exceeding its imports. Any friction introduced into that system will have immediate global consequences.

Tesla CEO Elon Musk reacted to the move on his X platform, criticising the decision and warning about its industrial impact.

“This is not good,” Musk wrote. “Silver is needed in many industrial processes.”

Why are the United States and China racing to secure control of silver?

Yes, silver plays a crucial role in electrifying the world. But more importantly, it is an irreplaceable metal powering the AI boom. 

From data centers and advanced chips to high-performance electronics and energy-hungry infrastructure, silver sits at the heart of the physical systems that make artificial intelligence possible.

Silver is incorporated into many of the physical components on which AI hardware depends. It is used in connectors, wiring, and high-reliability electronic components that must work without failure inside AI servers running under intense electrical and heat stress.

Oxford Economics projects that silver will benefit from a 65% increase in U.S. data center buildouts, as demand for hardware materials grows.

For instance, consider AI chips used in data centers. NVIDIA’s A100, H100, and H200 GPUs—along with the newer Blackwell B100 and B200 chips now being deployed in hyperscale AI data centers—rely on silver in high-speed interconnects, power delivery systems, and advanced packaging to handle extreme electrical loads and heat density.

That is why today, corporations and countries alike are rushing to secure more silver. For example, Samsung has prepaid $7 million to secure two years of silver supply from the La Parrilla silver mine in Durango, Mexico, thereby locking in output before production restarts. The deal grants Samsung full offtake rights in exchange for upfront financing, ensuring guaranteed access to physical silver.

The new year has begun, yet silver prices continue to climb. That persistence sends a clear signal: this is no longer a temporary market phenomenon, but a structural supply-chain issue. With inventories thin and supply slow to respond, even minor disruptions are now enough to push prices higher. Currently, what the market reflects is not speculation but stress.

Interestingly, the AI boom, green tech, and the electrification of the world depend on a volatile white metal today.

This newsletter was written by Shyam Gowtham