December 1, 2025 | Emerging Markets Debt
Senior Corporate Credit and Sustainability Analyst
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All that glitters may not be gold—at least this year. Silver has emerged as one of the best-performing metals in 2025, with prices surging close to 80% as of mid-November. This rally has been fueled by a combination of robust investor inflows, tight physical market conditions, and strong industrial demand, particularly in the first half of the year. Emerging markets (EM) debt investors may want to take note.
As of November 2025, silver-backed exchange-traded funds (ETF) flows have surpassed all of 2024. Meanwhile, physical demand has also been supportive, with India, a top buyer, accelerating purchases ahead of the holiday period. Despite some softness in jewelry demand due to high prices, the overall appetite for silver remains firm.
In fact, the Silver Institute expects a deficit again this year and confirmed that 2025 marks the fifth consecutive year of global silver shortages, with demand consistently outpacing supply. This imbalance has been exacerbated by inventory shifts, especially in the United States, where metal stockpiling ahead of potential tariffs created liquidity squeezes in other regions.
Earlier this year, and around the “liberation day” headlines, we noticed silver lagging gold as the latter pushed higher. The gold-to-silver ratio briefly exceeded 100:1, prompting many investors to view silver as undervalued. That perception triggered a wave of buying, and silver prices rallied to eventually outperform gold year to date. The gold-to-silver ratio touched its lowest point this year in November at around 78:1, a value in line with long-term averages.
Silver’s dual role as a precious and industrial metal has added to its appeal this year.
Beyond price dynamics, silver’s dual role as a precious and industrial metal has added to its appeal this year. Silver’s industrial demand has expanded over the past few years due to growth in solar photovoltaic (PV) cells and other electrical applications in China. That demand accelerated as we headed into the first half of this year as developers rushed to secure projects ahead of the transition from solar PV feed-in tariffs to a more market-based system for new applications.
Silver’s future performance will likely hinge on several factors. Continued investor demand could be driven by geopolitical tensions, sticky inflation, and potential U.S. Federal Reserve rate cuts, all of which have historically supported precious metals.
However, we believe that industrial demand could moderate due to some anti-involution measures in China, including the roll-off of solar subsidies. Industrial demand is more tied to economic growth and manufacturing activity, and we need to see how that will play out next year.
The United States added silver to its critical minerals list in early November, which might influence trade flows and liquidity.
Importantly, the United States added silver to its critical minerals list in early November, which might spark renewed tariff fears, potentially influencing trade flows and liquidity.
All factors considered, we believe volatility is likely to persist in the silver markets. Silver is a relatively small market and any cooling in investor sentiment or industrial demand could weigh on prices.
Looking at the gold-to-silver relationship, we believe it’s important to recognize the distinct market dynamics of each metal. Gold benefits from central bank buying, which we believe is a structural demand component that silver lacks. Silver, on the other hand, is more sensitive to industrial cycles and liquidity shifts.
As we have highlighted previously, EMs are major silver producers, with Mexico, China, and Peru the top three producers worldwide. We believe EMs are certainly not short of opportunities to invest in silver-producing companies or countries, as most of the production of silver comes from EM countries.
Alexandra Symeonidi, CFA, is a senior corporate credit and sustainability analyst on William Blair’s emerging markets debt team.
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