Why has silver outperformed gold in gains? 5 major strategies for investing in silver in 2025, even small investors can double their profits

Why Has Silver Price Movement Become a Market Focus?

Entering 2025, silver performance has been astonishing. From the early-year lows to now, silver prices have increased by over 120%, far surpassing gold’s 60% gain. Many investors are beginning to question: Is silver really more worth buying than gold? The answer isn’t that simple, but silver indeed possesses unique profit potential.

Currently, silver has broken through $65 per ounce, hitting a ten-year high. Bank of America has set its 2026 silver target price at $65 (with an annual average of $56), and the market is optimistic about further upside potential. The gold-silver ratio is now about 66:1, still within a reasonable range. The decline in this ratio reflects a market reassessment of silver demand.

Core Differences Between Gold and Silver: Why Is Silver’s Rise More Remarkable?

Application Differences — Silver is an Industrial Metal, Not Just a Safe-Haven Asset

Gold is mainly used for store of value and hedging, while silver’s uses go far beyond. Solar panels, electric vehicles, semiconductors, 5G networks, AI data centers — these growth engines of 2025 are heavily consuming silver. Industry data shows that green energy and AI development are driving silver demand to grow over 20% annually. From H100 to the latest AI chip packaging, silver usage has increased about 20% compared to traditional chips, forming a rigid demand.

Price Base Effect — Low Prices Bring High Leverage

With the same investment amount, silver can buy more units. Since gold prices are typically 30 to 120 times higher than silver, the relative affordability of silver allows small investors to participate at a lower threshold. When prices rise, percentage gains naturally amplify.

Volatility Advantage — Greater Upside Potential

Silver’s price volatility is much larger than gold’s. During bullish trends, silver often exhibits a “catch-up” phenomenon, with profit percentages reaching 1.5 to 2 times that of gold. However, this also means higher risk, suitable for investors who can tolerate short-term fluctuations.

Supply Bottlenecks Driving Prices Up

The silver market has experienced supply deficits for five consecutive years, with cumulative shortages exceeding 800 million ounces. Slow mineral growth and declining inventories provide strong upward support for silver futures.

Five Major Factors Driving Silver Price Rise in 2025

Factor 1: Accelerated Green Energy Transition, Explosive Industrial Demand

Large-scale expansion of AI data centers worldwide and the proliferation of emerging energy technologies have created unprecedented demand for silver. The accelerated development of the green energy industry in 2025 directly translates into long-term procurement needs for silver.

Factor 2: Persistent Supply Tensions

Five consecutive years of supply deficits have led to structural shortages in the market. This supply-demand imbalance naturally supports higher silver prices.

Factor 3: Weakening US Dollar and Rate Cut Cycle

In 2025, the US officially enters a rate-cutting cycle, and the dollar index weakens. In a low-interest-rate environment, non-interest-bearing assets like silver become more attractive. Investors tend to allocate to precious metals to hedge inflation expectations.

Factor 4: Rising Geopolitical Risks and Increased Safe-Haven Demand

Global economic uncertainties have increased, with many governments listing silver as a “key mineral.” Its safe-haven attribute has shifted from inflation hedge to “geopolitical supply chain risk hedge,” elevating silver’s strategic value.

Factor 5: Convergence of Gold-Silver Ratio, Validating the Catch-Up Logic

The gold-silver ratio has rapidly converged from 80:1 toward 60:1 or even lower. Historically, whenever the ratio drops from high levels, silver experiences significant catch-up rallies. This time is no exception.

Correlation Between Silver and Gold Trends

According to Chicago Mercantile Exchange statistics, the long-term correlation coefficient between silver and gold prices ranges from 0.4 to 0.8, showing a clear positive correlation. However, silver is influenced by more complex factors — it not only responds to safe-haven sentiment but also closely follows technological and industrial economic cycles. This often results in steeper price curves compared to gold when moving in the same direction.

Five Practical Ways to Invest in Silver

Taiwan investors have various channels to access silver, listed here from lowest to highest risk and cost:

1. Physical Silver (Jewelry, Silver Bars, Silver Coins) — The Oldest but Least Efficient

Physical silver is the most familiar form for the public, but in terms of investment efficiency, it has obvious drawbacks: high transaction costs (large spreads), difficulty in liquidity, and the need for proper storage. Unless for decoration or long-term storage, physical silver is not recommended for trading. For investment purposes, its poor liquidity and high costs significantly eat into profits.

2. Silver Certificates — Convenient but Still Costly

Banks in Taiwan, First Trust, Yuanta Bank, etc., offer silver certificate services. Buying is simple, with bank custody, and regular dollar-cost averaging is possible. But they also face higher buy-sell costs, making them more suitable for long-term holdings rather than frequent trading.

3. Silver Stocks and ETFs — For Conservative Investors

Silver-related stocks (e.g., Pan American Silver PAAS) and silver ETFs (e.g., SLV) have low trading costs, flexible trading hours, and are suitable for trading during stock market hours. However, due to limited leverage and only long positions, these tools are best for investors optimistic about silver’s long-term prospects with a conservative approach.

4. Silver Futures — Mainstream Tool for Short- to Medium-Term Traders

CME’s silver futures (SI) have trading volumes reaching hundreds of thousands of contracts, operate nearly 24 hours, and allow flexible long and short positions. But futures involve delivery and rollover time limits, requiring operations before expiration. More suitable for experienced short- to medium-term speculators.

5. Silver CFDs (Contracts for Difference) — High Leverage for Small Capital, High Efficiency

Silver CFDs and futures share similar trading logic — margin trading with leverage, allowing long and short positions. The advantage of CFDs is higher leverage, no settlement or rollover issues, and more flexible operations. Platforms typically offer stop-loss, take-profit, and trailing stop tools. While CFDs carry leverage and market risks, they are the best choice for investors with limited capital seeking flexible trading and profit amplification.

Practical Strategies to Maximize Gains with Limited Capital

If funds are limited but you want to seize silver’s swing opportunities, consider:

• Trading small positions with silver CFDs, using leverage (recommended no more than 5x)
• Setting clear stop-loss, take-profit, and trailing stop mechanisms before opening positions
• Monitoring the gold-silver ratio and gold trends as entry references
• Using technical indicators like RSI, MACD to catch turning points

Example of Silver CFD Trading

Suppose on December 19, 2025, you trade silver at about $65.40/oz on a trading platform:

• Open position at $65.00, with 1:100 leverage, trading 0.1 lot (500 ounces)
• Set stop-loss at $63.00
• After a few days, silver rises to $68.00, and you close the position

Without leverage, investing about $6,500 yields a profit of $1,500, about 23% return.

With 100x leverage CFD trading, the same 0.1 lot (500 oz) requires only about $65 margin, but the profit remains $1,500, resulting in a return of approximately 2,300%.

(Note: The above example excludes transaction costs, and leverage also amplifies potential losses.)

Optimal Trading Hours

Based on Asia GMT+8, the best time to trade silver is from 8 PM to 2 AM Taiwan time (overlap of European and American markets). During this period, market volatility is highest, signals are clearer, and volume is high — ideal for short-term trading.

Methods to gauge silver price trends:

• Refer to gold movements: the gold-silver ratio usually moves in tandem, with gold leading silver
• Combine fundamental analysis: USD index, interest rate policies, industrial metal trends
• Monitor historical levels of the gold-silver ratio: typically oscillates between 50 and 80; above 100 indicates silver is undervalued, presenting better entry opportunities
• Be flexible in adapting to market style shifts: when risk appetite strengthens, silver may shift from safe-haven to risk asset, requiring strategy adjustments

Conclusion: Rational Thinking in Silver Investment

Silver indeed has the potential to surpass gold, but only if you understand its volatility and risks. Due to its low price base, diverse uses, and tight supply, combined with market sentiment, silver often experiences large swings in a short period. Choosing the right tools (like CFDs), timing, and risk management can enable even small investors to maximize capital efficiency.

Key point: Success isn’t about the size of your capital but how you make your money work for you. In a bullish environment for silver prices, leveraging technical analysis and margin tools allows small capital to generate substantial returns.