Silver Surging Toward Huge Break Out
25 July 2025
Silver led the precious metal market higher this week, with the precious metal surging beyond USD $39oz. Gold was also higher, last trading at USD$3,365oz, with the gold to silver ratio (GSR) currently sitting at 86.
While the market has continued to move higher across the week as a whole, both gold and silver pulled back in overnight trading, as hopes of a trade deal between the EU and the US strengthen, with suggestions the Trump administration will settle for a 15% tariff on European imports, similar to the deal the United States now has in place with Japan.
This easing (as opposed to a resolution) of trade tensions took some of the safe haven bid out of the precious metal markets in the last 24 hours, with silver at one point looking like it would surge above USD $40oz, while gold had been trading above USD $3,400oz earlier this week.
Despite the daily volatility, most market observers and investors see that precious metals are in a bull-market mode, with the opportunity for significant gains in the years ahead.
Given this backdrop, it remains no surprise that we continue to see elevated levels of trade activity at ABC Bullion, interest in new products including our Untamed Landscapes series, as well as new account creations, and adoption of our Gold Saver program.
Silver in particular has seen a spike in demand, with clients increasingly of the view that it is a must hold in their portfolio, given its
Historical undervaluation, relative to gold based on a gold to silver ratio, that remains close to 40% above its long-term average.
Outperformance in periods of high inflation, with silver averaging returns in excess of 20% in years inflation was 3% or higher.
Performance in prior precious metal bull markets, with silver delivering average returns in excess of 350% in these periods.
Industrial applications, including the surge in photovoltaic demand, which has contributed to a multi-year physical deficit (where total demand exceeds supply).
Precious metals investment manager Sprott recently published an update looking specifically at the silver market, with their report reinforcing some of the themes mentioned above. The key takeaways from that report noted;
Silver Bull Market Gathers Strength: Silver has surged nearly 25% year-to-date in 2025, breaking past $35oz, driven by structural deficits, industrial growth and renewed investor interest.
Persistent Market Deficits: Global silver supply has not kept pace with demand for seven consecutive years. The cumulative shortfall has intensified upward price pressure.
Industrial Demand Remains a Key Driver: Industrial demand accounts for 59% of usage for silver, which is essential to solar panels, EVs and consumer electronics.
Potential for a “Silver Squeeze”: Freely traded silver inventories have been heavily diminished, and silver may be poised for sharp upside on even modest demand spikes.
Given this backdrop, a price breakout in silver above USD $40oz, which will likely kickstart a wave of capital rotation into the precious metal, would not be unexpected in the period ahead.
Gold in the meantime, while not necessarily offering the same return potential silver does in precious metal bull markets, is likely to remain the go to precious metal for those who have a heavy focus on preserving capital and managing overall portfolio risk.
This is driven by a number of factors, most notably gold’s strong negative correlation to falling risk assets, its exceptional liquidity, and purer investment and monetary demand drivers, with only a small portion of overall gold demand driven by industry.
Gold Will Continue to Thrive
Institutional asset managers, as well as central banks of course, are also likely to continue to favour gold, with the former increasingly looking at gold as a liquid defensive alternative asset.
The World Gold Council recently published a paper on this subject, both the rise of alternative assets as a share of institutional portfolios, and gold’s potential role, with their paper noting that;
The rise of alternative assets in institutional portfolios has been driven by the pursuit of enhanced returns, broader diversification, and insulation from traditional market cycles. Yet, these benefits often come with trade-offs – limited liquidity, delayed valuations, and exposure to economic shocks that may not be fully priced in real-time.
While not always classified as an ‘alternative’, gold offers distinct advantages: it is highly liquid, lowly correlated to other asset classes, and tends to perform well during periods of systemic stress, with its inclusion in a portfolio acting as a shock absorber.
Gold enhances downside resilience and provides capital flexibility across alternative asset strategies when distributions slow or exit timelines extend.
The World Gold Council report summarised their findings by noting that gold acts as a shock absorber, a source of liquidity, and a diversification asset, complementing private investments that are increasingly finding favour in institutional portfolios.
These factors are almost to further support gold in the United States pensions market going forward, with news the Trump administration is planning to allow 401k plans (one of the most popular ways Americans save for their retirements) to broaden their scope of allowable investments beyond stock and bond mutual funds.
As part of the changes, a whole suite of alternative assets, including gold, would be allowable investments going forward, with these changes representing a huge change, and a huge opportunity for this US $9 trillion market.
See You at the Precious Metal Forum Next Month
The ABC Bullion Precious Metal Forum, Gold and the New World Order, is less than one month away. The forum will be headlined by a keynote presentation from New York Times best-selling author and globally renowned precious metals expert Jim Rickards.
General Admission tickets at $50 are still available for the event, though we expect to sell out soon. Don’t miss out, with tickets including drinks, canapés, and a voucher for 1oz ABC Bullion silver coin that is redeemable alongside the purchase of another bullion product.
Jordan Eliseo
General Manager, ABC Bullion Australia
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