In a historic market event, the international spot price for silver has breached the once-unthinkable $100 per ounce milestone, while gold approaches the $5,000 mark. The COMEX silver March contract hit a record high of $100.160 per ounce on Friday, March 15, 2025, marking a more than tripling of its price within a year. Concurrently, gold prices on COMEX reached a record $4,969.69 per ounce, just shy of the $5,000 landmark.
The surge in silver is attributed to a "perfect storm" of converging factors. A prolonged structural supply deficit, where mining output has consistently failed to match robust demand for over a decade, forms the core driver. This is compounded by explosive industrial demand from the green energy transition, particularly for use in photovoltaic solar panels and electric vehicles. Geopolitical tensions disrupting supply chains and increased monetary demand as a hedge against currency devaluation have further fueled the rally.
David Morrison, senior market analyst at Trade Nation, described the silver market as being "in the midst of a blow-off top, with talk of supply shortages and a massive short squeeze bringing in fresh buying momentum." He noted the presence of significant FOMO (Fear Of Missing Out) but also warned that the extended rally increases the likelihood of a significant reversal.
Gold's 14% price increase since the start of the year is partially linked to geopolitical tensions, specifically concerns regarding US President Donald Trump's stated intention to implement tariffs related to Greenland. Although prices dipped briefly after an agreement was announced, they stabilized at higher levels. Thu Lan Nguyen, head of FX and commodity research at Commerzbank AG, stated this indicates the market remains cautious about fully pricing out the associated risks.
The rally has profound implications. Manufacturers face severe cost pressures, forcing research into using less silver per unit or finding substitutes. The gold/silver ratio has plummeted to 50, down from 90 a year ago, indicating silver's dramatic outperformance. Dr. Anya Sharma, Head of Commodities Research at the Global Markets Institute, emphasized this represents a "deep market transformation" driven by a collision of monetary and physical demand, suggesting elevated price levels may persist due to a permanent market deficit.
