According to the latest "2025 Precious Metals Forecast" report, despite the risk of a potential recession in the U.S. economy, silver is expected to continue its strong performance in 2025, likely outperforming gold again, with spot prices potentially exceeding $40/ounce.
This year, silver has been the best performing among all precious metals, with prices up by 26.82% as of the end of November. This increase is largely attributed to changes in the global interest rate cycle, the continued growth in solar photovoltaic demand, and a strong rebound in the Indian market. Analysts note that despite silver's impressive performance, its price remains historically undervalued compared to gold. The rising gold-silver ratio indicates that silver's relative value has not been fully realized yet. It is expected that as silver prices rise, the gold-silver ratio will return to around 67 after 27 years, indicating that silver prices could reach $40/ounce.
However, despite the short-term optimistic outlook, analysts also warn that future economic recessions could impact the industrial demand for silver. Particularly against the backdrop of a potential U.S. economic recession, the demand for silver as an industrial metal might be under pressure. Data from the U.S. Treasury shows that the debt yield curve, after experiencing the longest inversion since 1980, has reversed, indicating an increased risk of a U.S. economic recession within the next 6 to 12 months. Historical data shows that during economic recessions, silver typically underperforms compared to gold, and industrial demand, especially from the electrical, electronics, and solar sectors, may not grow significantly.
Nonetheless, the demand for solar photovoltaics remains a major support factor for the silver market. With the global demand for clean energy growing, the application of silver in solar panels is expected to become an important driver of market growth in the coming years. Analysts believe that even if the U.S. economy faces a recession, the ongoing demand in the solar sector can still support silver's performance to some extent.
Overall, silver will remain a highlight in the precious metals market in 2025. Despite the potential challenges of an economic recession, its long-term outlook remains optimistic. Investors should pay attention to related market dynamics and adjust their investment strategies flexibly.
