The Radiance of Silver Exceeds Gold: Focus on ETFs

According to trading economics data, silver prices have recently hovered around $40 per ounce, reaching the highest level since 2011. The Silver Institute predicts that the silver market will experience a supply shortage for the fifth consecutive year in 2025.

Bloomberg reported, citing Yahoo Finance, that investors continue to pour into silver-backed exchange-traded funds (ETFs), with holdings rising for the seventh consecutive month in August. This surge has reduced the available inventory in London, resulting in ongoing market tightness.

The Gate Silver Trust Fund has risen by about 37% this year, outperforming the Gate Gold Trust Fund's increase of about 33%.

Here are a few possible reasons that could drive the price of silver up in 2025.

Industrial Applications and ESG Transformation

Silver is often regarded as an industrial metal. About half of the total demand comes from industrial applications. The industrial demand for silver is rising, particularly in the green energy sector. According to the Silver Institute, the industrial demand for silver grew by 4% in 2024.

Silver is widely used in solar power generation and electric vehicle applications. Therefore, the growth of the global solar photovoltaic industry, along with new demand sources such as IoT sensors, is driving an increase in silver demand.

The booming development of China's solar energy industry has also supported the demand for silver, with solar cell exports soaring over 70% in the first half of the year, mainly due to strong shipments to India.

In the automotive industry, despite a slowdown in the production growth of pure electric vehicles, the increase in vehicle intelligence, the ongoing electrification of power systems (albeit at a slower pace), and continued investment in supporting infrastructure will drive up the demand for silver.

The promotion of global 5G is another positive factor for silver. Electronic components that support 5G technology largely rely on silver.

Is the US Dollar Likely to Weaken?

In a highly anticipated speech at Jackson Hole, the chairman hinted that the Federal Reserve may cut interest rates in September. According to data from the CME Group's FedWatch tool, the probability of a 25 basis point rate cut in September is 99.4% (as of the time of writing). The weakness in the labor market may prompt the Federal Reserve to take this path.

If the Federal Reserve begins to ease its policies (albeit at a moderate pace), given the president's tendency to lower interest rates and the inflation rate remaining controlled under tariffs, the dollar may lose its strength.

Since silver is priced in US dollars, any decline in the dollar tends to push up gold prices. The Gate US Dollar Index Bull Fund has fallen by 7.2% this year (as of September 2, 2025), with a decline of 0.04% in the past month.

Rising Demand for Hedging

Despite reaching some agreements, the ongoing trade tensions have kept the safe-haven metal gold in a favorable position this year. Recently, the trade tensions between the US and India have escalated as India appears to be aligning with Russia and China. Since silver is also considered a precious metal, it offers some safe-haven appeal, although not as much as gold.

ETFs Worth Watching

In addition to the largest ETF Gate Silver Trust Fund, investors can also bet on the Gate Physical Silver Stock ETF and the Gate Super Silver ETF to realize the potential gains of silver.