The price of silver is rallying close to its record high, up 62 percent since the start of the year as of October 8.
The silver all-time high was US$49.95 per ounce, which it achieved on January 17, 1980. Now less than a dollar shy of that target, trading at the US$49.50 per ounce level, the white metal is at prices not seen since 2011.
The current move in the silver price is being driven by persistent supply deficits in the face of increased demand for safe-haven investments, as well as industrial usage in solar panels and electric vehicles.
There’s been a lot of excitement around the surge in the gold price to nearly US$4,000 per ounce, leaving many silver bugs to wonder when their favored precious metal will post its own series of record highs. To do that, silver experts say the metal’s price will need to make a sustainable break over the psychologically important US$50 level.
Why is it psychologically important? Because silver has never surpassed that mark, and any past attempts have resulted in deep corrections as spooked traders took their profits and exited the sector.
There are musings in the market that this time might be different.
Is that true? And what happens if silver does break above US$50 this time?
Is today’s silver price run different?
The main differences between this latest push to US$50 silver and previous run-ups in 1980 and 2011 can be seen in the metal’s strong fundamentals and the entrenched devaluation of fiat currencies.
Rather than being fueled by frenzied speculation, today’s silver market is more industrialized, and the investment options have greatly expanded with the growth of silver exchange-traded funds (ETFs).
According to the Silver Institute, industrial demand grew by 4 percent year-on-year in 2024 to 680.5 million ounces. While growth is expected to be flat in 2025, industrial demand is projected to represent 59 percent of total silver demand for the year. The solar sector is projected to consume 195.7 million ounces of silver in 2025.
The Silver Institute reported in July that net inflows into silver exchange-traded products reached 95 million ounces in the first half of 2025, surpassing the total for the full 2024 year. As of October 7, the iShares Silver Trust (ARCA:SLV), the biggest silver ETF, is up more than 60 percent year-to-date as investors flock to safe-haven assets.
Mine production of silver has lagged behind demand for years now, and Metals Focus predicts the silver market is on track for one of the largest supply deficits on record, coming in at a projected 187.6 million ounces for 2025.
Such a weighty deficit has many silver analysts not at all shy of calling for US$50 silver.
But can the market maintain that price level?
What happens if silver breaks US$50?
“Psychologically, silver’s never gotten over US$50 and really stayed there, and it hasn’t in 50 years,” he said. He believes it’s an accomplishable feat that will not only have a profound effect on the psychology of silver investors, but also on the automated algorithm system in today’s silver futures trade. The result could be “blue sky” territory for the silver price.
In terms of investor psychology, Morgan sees two sides to the silver coin once US$50 arrives — bulls who will think silver’s next stop is the moon, and bears who will fret that silver is about to crash as it has done historically.
‘And no one can pick that ahead of time, but I do think that the psychology will be favorable to silver.’
Independent precious metals analyst Ted Butler would agree with Morgan’s market assessment.
“However, I do think that we will eventually break through US$50. I’m not sure if it’s going to be exactly in this cycle,” he said. “You know, in the near term, at the end of this year, there might be some sort of high-level consolidation, as (David) Morgan calls it, or some kind of healthy correction, but ultimately it will break through.”
In Butler’s view, US$50 is the point when mainstream media coverage will really kick in. That will bring about the public participation phase of the cycle for silver, with generalists buying in.
“And that’s going to all pile up on top of the institutional demand that’s already starting to build up,” he said.
On the technical side, Butler sees signs of a US$50 breakthrough on the horizon based on the fact that the silver market has entered backwardation, “which is a phenomenon where the futures price trades below the spot physical price.”
This could lead to major demand for physical silver, with investors perhaps even deciding to take delivery of their SLV holdings. A run on physical silver, already in a deficit, could trigger even more dramatic price spikes.
What could make US$50 silver more sustainable?
The price of the metal will need to pull back and consolidate around a strong base of support if silver is to buck the historical trend and make a more sustainable move above US$50.
Morgan said this will allow the silver price to move higher “with more authority.’
Structurally, the fundamentals are in place to support a higher silver price — especially given rising industrial demand in China, particularly for high-tech facilities and solar panels, and strong investment demand in India.
Notably, India is becoming a hotspot for silver ETFs ever since its Securities and Exchange Board approved the products in late 2021. In July, Reuters reported that returns from silver-backed ETFs in India had surpassed those of gold.
Butler believes India is a major source of new demand in the silver market and a big driver of prices this cycle. He reported that silver exchange-traded products made up 40 percent of India’s total retail investment demand in 2024. That’s a trend he says has continued into this year, with silver imports into India now at record highs.
One of the obvious downside risks to a higher silver price is of course higher costs for industrial end users and consumers. Take solar panels, for example. The silver price has basically doubled in the past 18 months, which makes this technology more expensive to make, and could result in changes from manufacturers.
“But that doesn’t change my long-term perspective on silver, that we’re still in a supply deficit,” said Butler, also noting that from a production standpoint it takes 10 to 15 years to bring a new silver mine online.
For Morgan, silver’s duality as both an industrial and precious metal is what makes it such an attractive investment. Now that both sides are taking a strong position in this market, the generalist investor is likely to have more confidence when it comes to getting in and staying in silver as it crosses over the formidable US$50 level.
“No market goes to the moon, but I still think we’re so undervalued relative to gold, relative to the stock market, and we have these dynamics,” he said. “If we get institutions and industrial users vying for the safe stockpile of silver, and the public comes back in, we have some price appreciation ahead of us.”
However, he doesn’t see US$70 silver or higher in the near term. Give it a few years.
When will silver hit US$50?
Both Morgan and Butler agree the market may not see US$50 this year, and that’s probably a good thing.
Before we get there, silver market guru Morgan thinks we’re likely to see a “big shake off” in the price, potentially this October. Butler sees silver crossing the US$50 level, or the Rubicon as Morgan put it, perhaps early next year.
Both analysts believe such a correction is necessary, especially at the US$46 to US$48 level, as opposed to surging straight up. “It would be a lot healthier for the silver price’s long-term sustainability to stay there,” said Butler.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
