Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Silver’s dual role as a popular safe-haven investment and highly valued industrial material sets up the shiny metal for another outstanding year. Saxo Bank views steady industrial demand and rising geopolitical uncertainty as major catalysts behind silver’s 2024 rally which took the precious metal to highs not seen in 12 years. The banking giant sees this same one-two punch of safe-haven and industrial demand fueling another surge in 2025, predicting silver prices to reach $40/oz.
A Tale of Two Demands
Due to its unique physical properties and inherent value, silver has long enjoyed diversified demand. Industrial usage consumes the lion’s share of the silver supply at 55%. Investments, in the form of physical silver bullion and coins, comprised the second largest source at 27%. Along with a slew of economic and geopolitical issues, this dual demand is supporting higher silver prices through 2025, according to Saxo Bank analysts.
Silver’s Sparks
In a report to investors, Saxo Bank pinpoints the fundamentals behind silver’s 2024 rally:
Geopolitical Uncertainty – Two ongoing regional wars and rising global tensions have the world economy on edge, pushing investors to safe-haven assets such as silver.
Central Bank Activity – Aggressive central bank demand has propelled gold prices to new highs which is paving the way for the broader precious metals market.
Global Debt Concerns – The $36 trillion national debt, compounded by the $312 trillion global debt, weighs on dollar confidence and pushes investors toward inflation hedges.
Interest Rate Expectations – The Federal Reserve’s scheduled rate cuts are reducing the opportunity cost of physical assets, increasing the appeal of non-yielding assets such as silver.
Gold-Silver Correlation – Silver’s rise reflects gold’s surge as the shiny metal tends to follow in the footsteps of its more popular and widely traded cousin.
Analysts view these economic and geopolitical factors as remaining in play throughout 2025, continuing to fuel silver’s rally.
Silver’s Supply Shortage Continues
The silver market is headed for another steep supply shortage, marking the fourth year that demand has outpaced supply. The Silver Institute expects 2024 demand to reach the second-highest level ever at 1.21 billion ounces with supplies remaining virtually unchanged. Silver’s projected rise in value is expected to further constrict supplies. As Saxo Bank points out, “higher prices are unlikely to stimulate a significant production increase.” This could result in a positive feedback loop wherein limited supply (in tandem with rising demand) elevates prices which, in turn, places a ceiling on silver output.
Silver to Outperform Gold
Measured from trough to peak in 2024, silver posted one of the largest returns out of all asset classes, outperforming gold and stocks. In 2025, Saxo Bank sees the shiny metal’s dual position, flexing demand from industrial and investment sources, empowering another market-leading surge.
The gold-to-silver ratio is on track to reach 75 which is relatively low compared to the past few months. This development could push silver prices to $40, representing a 25% jump from current levels. Saxo Bank’s projection mirrors many 2025 silver price predictions which show widespread bullishness for the shiny metal.