Complete Guide to Silver Investment: Why Small Investors Must Watch This Opportunity in 2025? The Truth Behind the Surge in International Silver Prices

Why Are International Silver Prices Skyrocketing? The Five Driving Forces for 2025

Since the beginning of the year, international silver prices have surged from lows to $65 per ounce, hitting a ten-year high with an increase of over 120%. This is not a coincidence but the result of multiple factors resonating together.

Industrial demand is the true engine of silver. Unlike gold, which is purely a safe-haven asset, silver is widely used in solar panels, electric vehicle batteries, semiconductors, 5G communications, and AI data centers. 2025 is a critical year for green energy transition and large-scale AI infrastructure expansion. From H100 to the latest AI chips, silver usage has increased by about 20% compared to traditional chips. This rigid demand is profoundly changing silver’s properties — it is no longer just a precious metal but a growth industrial metal.

Supply-side constraints continue to provide strong support. The silver market has experienced supply deficits for five consecutive years, with cumulative shortages exceeding 800 million ounces. Mining growth is sluggish, inventories are continuously declining, and this supply-demand imbalance provides a solid foundation for silver’s rise.

Convergence of the gold-silver ratio drives a rebound effect. Historically, gold prices have been about 30 to 120 times higher than silver. But as gold prices surge, the gold-silver ratio quickly narrows from 80:1 to 60:1 or even lower. A declining gold-silver ratio often signals the start of a silver bull market. Historical data shows that when the ratio falls from high levels (above 80), silver tends to experience strong rebound rallies, with gains often 1.5 to 2 times those of gold. This year’s rally is the best proof — silver has risen over 120%, while gold’s increase is only about 60%.

Geopolitical and economic uncertainties boost safe-haven buying. Many governments have listed silver as a key mineral, elevating its safe-haven attribute from traditional inflation hedge to “resistance against geopolitical supply chain risks.” Investors flock to precious metals markets for protection, with ETF and physical demand remaining strong.

Weakening US dollar and loose monetary policies. In 2025, the Fed will officially cut interest rates, leading to a weaker dollar index. Priced in USD, silver becomes more attractive to international investors. Bank of America has raised its 2026 silver target price to $65.

Silver VS Gold: Why Is Silver Becoming the New Choice for Smart Investors?

Many instinctively think gold is more worth investing in than silver, but this concept is now outdated.

Silver’s applications far surpass gold. Gold is mainly used for jewelry and as a safe-haven asset, while silver is extensively used in solar panels, EVs, semiconductors, communications, and AI data centers. This means silver’s demand comes not only from investors but also from the rigid needs of global industrial upgrading.

Low silver prices mean lower investment thresholds. The same amount of capital can buy more silver, which is especially advantageous for small investors. You don’t need large sums to participate in precious metals investment, making silver the best entry point for retail investors.

Higher volatility in silver offers greater profit potential. Compared to gold, silver’s price swings are significantly larger. During bullish trends, silver often exhibits a “rebound” effect, with short-term gains 1.5 to 2 times those of gold. However, this also means higher risks, suitable for investors who can tolerate short-term fluctuations.

Both are highly correlated but driven by different factors. According to Chicago Mercantile Exchange statistics, the long-term price correlation coefficient ranges from 0.4 to 0.8, showing a clear positive correlation. But silver is influenced by more complex factors — besides risk sentiment, it also depends on technological industry cycles and industrial metal prices.

Five Silver Investment Methods Compared: Which One Is Right for You?

Different investment methods carry vastly different risks and returns. Small investors must choose carefully.

Physical Silver: The most traditional but least cost-effective

Silver bars, coins, jewelry can give a tangible sense of silver’s appreciation. But the issues are high buying/selling costs, difficulty in cashing out, and poor liquidity. Unless for long-term preservation and not urgent to cash out, physical silver is not recommended for investment.

Bank Deposit Accounts: Safe but limited profit potential

Many banks in Taiwan, such as Bank of Taiwan, First Trust, and Yuanta Bank, offer silver deposit accounts with simple procedures and safekeeping by the bank. Suitable for risk-averse investors holding long-term. However, regular fixed investments involve higher costs and are not suitable for frequent trading.

Silver Stocks and ETFs: Convenient and relatively stable

Silver-related stocks like Pan American Silver (PAAS) and ETFs like SLV have low trading costs, flexible trading hours, and clear advantages over physical silver. But due to limited leverage and only long positions, profit potential is relatively constrained, making them more suitable for conservative holdings.

Silver Futures: Mainstream leveraged trading tools

CME’s silver futures (SI) are the most liquid silver trading instruments, with daily volumes reaching hundreds of thousands of contracts. Trading nearly 24 hours, they allow both long and short positions at any time. But futures involve delivery and rollover requirements, needing to close or roll over positions before expiry. Ideal for short- to medium-term traders seeking to capture market swings.

Silver CFDs: The most flexible option

CFD trading is similar to futures — margin trading supporting leverage, long and short positions. Its advantages include higher leverage, no settlement or rollover issues, and more flexible operations. Most platforms offer stop-loss, take-profit, and trailing stop tools, which are very helpful for risk management. The downside is potential overnight holding costs and less liquidity stability compared to futures. CFDs are especially suitable for short-term traders with small capital aiming to amplify gains.

How Can Small Investors Maximize Gains with Limited Funds? Practical Trading Tips

If you have limited capital but want to seize silver’s swing opportunities, here are some key tips:

Step 1: Choose appropriate leverage multiples

For small trades with silver CFDs, it’s recommended not to exceed 5x leverage. Higher leverage increases profit potential but also amplifies losses proportionally. Beginners should start with lower leverage to practice.

Step 2: Establish comprehensive risk management

No matter what instrument you trade, set stop-loss, take-profit, and trailing stop levels in advance. This is crucial to protect small capital from being wiped out instantly. A common approach is to set stop-loss 2-3% below entry price, and take-profit 5-10% above, adjusting according to your risk tolerance.

Step 3: Confirm entry points with both technical and fundamental analysis

Monitor the gold-silver ratio and gold trends as leading indicators — gold often leads silver. Use RSI, MACD, and other technical tools to identify turning points. When international silver prices bounce at key support levels, combine with technical signals to go long, increasing success rate.

Step 4: Practical example

Suppose at the start of the year, the international silver price is about $65.40/oz. You open a long position at $65.00, using 1:100 leverage, trading 0.1 lot (equivalent to 500 ounces), with a stop-loss at $63.00.

A few days later, silver rises to $68.00. You close the position.

Without leverage:

• Capital invested: about $6,500
• Profit from price difference: $1,500
• Return on investment: approximately 23%

With 100x leverage:

• Capital invested: about $65
• Profit from price difference: $1,500
• Return on investment: approximately 2,300%

This illustrates the power of leverage — controlling large positions with minimal capital. But remember: losses are amplified equally.

When Is the Best Time to Enter? Choosing the Right Trading Window

Timing is also crucial. Using Taiwan GMT+8 as reference, the best window for trading silver is from 8 PM to 2 AM, when European and American markets overlap. During this period, market volatility is highest, signals are clearer, and trading volume is most active — ideal for short-term traders.

To judge market direction, consider these indicators:

Gold trend as the primary reference. Silver and gold tend to move in sync, with the gold-silver ratio often changing accordingly. Gold’s trend can preemptively reflect market sentiment shifts.

Combine fundamental and technical analysis. Watch USD index, Fed interest rate policies, industrial metal prices, etc., along with RSI, MACD to identify turning points.

The gold-silver ratio is a key indicator. Historically, it oscillates between 50 and 80. When the ratio is very high (above 100), silver is relatively undervalued, offering better entry opportunities. When the ratio falls from high levels to below 60, it often signals a rapid rebound in silver.

Pay attention to market style shifts. When risk appetite strengthens or weakens, silver’s role may shift from safe-haven to risk asset, or vice versa. Such shifts can significantly influence short-term trends, requiring close monitoring.

Does Silver Really Outperform Gold in Rises? The Final Answer

The answer is: Possibly, and with greater volatility.

Because of its low price baseline, diverse industrial uses, ongoing supply tightness, and market sentiment, silver often experiences sharp short-term fluctuations. If you can master entry timing and use appropriate trading tools (like CFDs), even small investors can effectively grow their capital.

Remember this core logic: It’s not about having more capital to make money, but about knowing how to make your money work hardest. The current upward cycle of international silver prices has just begun. Choosing the right investment method, setting proper risk controls, and patiently waiting for signals are much smarter than blindly investing large sums.