Follow the leader: Silver’s explosive rally reshaping the metals bull market

(Kitco News) - There’s been a lot of ink spilled over gold’s bull market and the fundamentals behind this three-year rally. But one thing has been missing for much of it: silver.

Gold has broken away from the rest of the precious metals pack thanks to its role as a true monetary metal. Central banks have been driving unprecedented demand as they look to diversify away from fiat currencies and into something more stable and tangible. Silver, with all its volatility, simply doesn’t fit the bill for official sector holders.

That singular demand has pushed the gold/silver ratio to extremes. In April it soared above 100—a five-year high and miles away from its long-term average between 50 and 60. 

Some analysts argue that silver’s absence in the rally has actually weighed on general investor interest in gold. After all, in a classic bull market, silver usually outperforms because of its volatility. Instead, it’s lagged for years, casting a shadow of skepticism over the whole precious metals trade.

But that skepticism is fading fast.

Silver is ending the week at a record high above $56 an ounce, up an eye-popping 97% since January. Gold, meanwhile, is testing major resistance at $4,200 for a year-to-date gain of nearly 61%.

The ratio between the two metals, which hit 100 in April, has plunged to 74, breaking through a long-term support line. And some analysts think the momentum could carry it all the way back to 50. If the growing chorus calling for $5,000 gold by 2026 is right, that would imply silver at roughly $100.

What’s changed? Investors are finally waking up to how scarce silver has become. 

Industrial demand tied to the accelerating electrification of the global economy has produced significant supply deficits for five straight years. Above-ground stocks have been depleted, and the metal that is available tends to be in the wrong form or the wrong place. That mismatch has fueled a string of supply shocks in 2025.

We saw the first big wave at the start of the year when massive volumes of silver poured into the U.S. as traders braced for potential tariffs under President Donald Trump’s global trade agenda. Silver ultimately wasn’t tariffed, but the fear never fully dissipated—especially after Washington officially labeled it a critical metal.

All that extra metal sitting in the U.S. tightened physical inventories elsewhere, especially in London’s over-the-counter market. Strong buying out of India added more strain, driving record lease rates and premiums worldwide. 

Some silver did leave the U.S. and China as traders chased those premiums, but rising demand in Asia only deepened the supply crunch. Reports show stockpiles at the Shanghai Gold Exchange have now fallen to their lowest level in a decade.

Silver could flow out of U.S. vaults, but that would just shift the next supply crunch West.

With demand surging and no easy supply fix in sight, analysts say silver’s newfound strength may be more than just a short-term burst. For now, the metal finally appears to be claiming its long-awaited place in the spotlight.