The silver market is experiencing unprecedented turbulence. On December 28, spot silver prices surged past $83 per ounce, marking a year-to-date gain of over 175%. However, just two days later, on December 30, the market saw a dramatic reversal—silver prices plunged nearly 10% in a single day, dropping back to around $70 per ounce. This sharp decline represents the largest single-day drop since 2021.
Renowned silver analyst Peter Krause believes the market established a new floor at $50 per ounce back in October, but the true bull run for silver may still be ahead. According to his models, based on current gold prices and a recalibrated gold-silver ratio, silver could potentially challenge its historic high of $300 per ounce over the long term.
Silver Price Surge and Pullback
The silver market delivered a rollercoaster performance as the year drew to a close. On December 28, spot silver prices climbed over 5%, breaking through the $83 per ounce mark and setting a new all-time high. This milestone capped a remarkable rally for silver in 2025, with prices up more than 175% from the year’s opening level of nearly $29.50 per ounce.
However, the record high was short-lived. The market reversed dramatically on Monday, with silver prices undergoing a significant correction. According to the latest data, spot silver retreated from its historic peak, tumbling nearly 10% in a single day to around $70 per ounce. This sharp pullback marked the biggest one-day drop for silver since 2021.
Gold followed a similar trajectory. After hitting a record high of $4,543.51 per ounce during early trading, gold prices fell more than 4.5% amid a broad correction across the precious metals market.
Supply-Demand Imbalance and Market Frenzy
Silver’s stunning performance is underpinned by profound structural shifts. Peter Krause points out that the core driver for the silver market is the repricing of a long-term structural deficit. According to his analysis, the cumulative silver deficit over the past five years (including this year) amounts to roughly 800 million ounces—almost equivalent to a full year of global mine supply. The Silver Institute forecasts that this deficit will persist over the next five years. One clear sign of tightening supply is the depletion of inventories at major exchanges. Krause notes that as early as 2024, inventories at key exchanges in London, New York, and Shanghai had already dropped sharply. Now, with exchange stocks nearly exhausted, the market is being forced to confront a severe supply shortfall.
Demand-side shifts are just as notable. Solar panel manufacturers now account for the bulk of industrial silver demand, and newer, more efficient technologies could drive usage even higher. In addition, investment demand has far exceeded expectations. According to the Silver Institute, silver-themed exchange-traded funds are expected to draw nearly 200 million ounces of investment demand in 2025—well above the previous forecast of 70 million ounces.
Divergent Market Views and Future Outlook
The future direction of the silver market has sparked heated debate among analysts. Optimists like Peter Krause argue that silver is entering a "frenzy phase," with the gold-silver ratio potentially plunging from its current level of around 68 to as low as 15. Based on this scenario and a gold price of roughly $4,500 per ounce, silver could be targeting $300 per ounce.
Ramnivas Mundada, Head of Economic and Corporate Research at GlobalData, offers a macro perspective, projecting that gold could rise another 8%-15% in 2026, while silver may climb 20%-35%. He believes the strength in precious metals is not just a classic flight-to-safety play, but a systemic response by institutions to geopolitical risks, a slowing US economy, and the trend toward de-dollarization.
Not all institutions share this bullish outlook. TD Securities takes a more cautious stance, arguing that the London silver market has already replenished the inventory lost over the past year, and predicting that silver prices could retreat to around $40 per ounce over the next year. BMO’s forecast is relatively moderate, expecting an average silver price of $56.30 per ounce in 2026.
Lessons from Divergence in the Crypto Market
By the end of 2025, financial markets are showing rare divergence. Since hitting record highs in October, Bitcoin and the broader crypto asset class have pulled back noticeably, with the Bitcoin price now hovering around $90,000 per coin. Meanwhile, gold, silver, and US equities have accelerated higher into year-end, creating a clear split in market performance. This divergence suggests that a structural shift may be underway. According to GlobalData’s Mundada, the rally in precious metals in 2025 signals deep structural changes in the international monetary system—global markets are moving away from a dollar-centric framework toward a more multipolar order.
Crypto investor Robert Kiyosaki has expressed strong interest in silver. He predicts that silver prices could triple from current levels by the end of 2025, calling silver "the biggest bargain today." Kiyosaki emphasizes the importance of holding physical silver rather than investing in silver ETFs, reflecting his longstanding skepticism toward paper assets and fiat currency.
Investment Strategies Amid Market Volatility
Amid intense volatility in the silver market, investors need to adopt more prudent strategies. Peter Krause notes that while silver is in a highly favorable position, that doesn’t mean the market is immune to corrections. He admits, "I wouldn’t be surprised to see a minor pullback in the near term." Still, he remains confident that the key factors supporting silver’s rally will persist for quite some time.
Investor Robert Kiyosaki urges investors to focus on physical silver and avoid ETFs, citing concerns about paper assets and fiat money. His approach mirrors his earlier stance on storing Bitcoin in cold wallets rather than through spot ETFs. This preference for physical assets stands in contrast to the current trend of mixed investment strategies involving both digital currencies and traditional precious metals.
On digital asset exchanges like Gate, investors can access a diverse range of asset classes. Gate supports over 4,100 cryptocurrencies, offering users a wide array of investment choices. The platform charges a flat 0.1% spot trading fee and provides security features such as two-factor authentication and cold storage, equipping investors with tools to manage risk in volatile markets.
Periods of market divergence are often a good time to reassess asset allocation. Ramnivas Mundada notes that this round of precious metals gains "is not just a typical flight-to-safety trade, but more of a systemic response by institutions to geopolitical risks, a slowing US economy, trade tensions, and the trend toward de-dollarization."
Silver prices have quickly pulled back after hitting record highs, but many analysts remain bullish on its long-term prospects. Peter Krause’s $300 silver target aligns with GlobalData’s forecast for a 20%-35% rise in silver by 2026. While silver fever grips the market, the crypto sector is undergoing a period of adjustment. This divergence may signal that global capital is mounting a deeper "systemic response" to geopolitical risks and the slowdown of the US economy.
