Insights 
VT 
In mid-October, the price of Silver exceeded $50 per troy ounce for the first time, later reaching nearly $59 by the end of November. This marks a doubling in Silver’s value since the start of the year, approaching its strongest annual growth since 1979. The Gold/Silver ratio has decreased to 72, lower than at any point since August 2021.
Stronger price gains for Silver compared to Gold have resulted from factors such as inflows of Silver into ETFs tracked by Bloomberg and a local shortage in supply. This shortage appeared first in London and then in Shanghai, contributing to a supply deficit forecasted at 95 million ounces for the year. The expectation is that Silver will soon realign with Gold, though the tight market situation will continue to support its price.
Supply Deficit and Industrial Demand
For the supply deficit to resolve, there would need to be a sharp decline in industrial demand, which remains unlikely. Silver demand continues for products like solar cells and electric cars. Future monetary policy by the US Federal Reserve could also favour Silver, with prices anticipated to increase to $59 per troy ounce in the next year. The Gold/Silver ratio is expected to rise to 75, aligning Silver more with Gold’s performance.
Silver has had an incredible run, doubling this year to nearly $59 per ounce. This momentum has pushed the Gold/Silver ratio down to 72, a level we have not seen since August 2021. However, with the price so extended, we believe the phase of silver dramatically outperforming gold is likely nearing its end in the immediate future.
The rally since October has been fueled by supply shortages in key markets like Shanghai. Before that, massive inflows into silver ETFs, totaling almost 3,000 tons between June and September 2025, drove the price higher. We have noted, however, that data from major ETFs showed a small net outflow last week for the first time in months, suggesting investor appetite is waning at these record highs.
A major price collapse seems unlikely because the market remains fundamentally tight. A supply deficit of 95 million ounces is projected for this year, supported by relentless demand from solar and electric vehicle sectors. China’s manufacturing data released yesterday confirmed this industrial strength, which should provide a solid floor for prices moving forward.
Trading Strategies and Future Outlook
We must remember the sharp correction after the last major spike to near $50 in April 2011, which serves as a cautionary tale for those chasing the rally now. Given the high implied volatility, traders could consider selling out-of-the-money call options to collect premium, betting that the explosive upward move will pause in the coming weeks. This strategy capitalizes on the idea that the rally is losing steam without betting on a crash.
Looking ahead, the expected easing of monetary policy from the U.S. Federal Reserve should support all precious metals. The minutes from the November 2025 FOMC meeting reinforced expectations for a rate cut early next year. A potential trade for the coming weeks could be to play the Gold/Silver ratio, which is expected to climb back towards 75, by going long gold and short silver.
