Silver is an important input for artificial intelligence data centres.Angelika Warmuth/Reuters
Gold has grabbed the biggest headlines this year but silver has delivered bigger gains. Investors have begun to take notice.
While the bull market in gold producers is no slouch, interest in silver producers has been accelerating through the end of 2025, raising questions about the sustainability of the rally.
A standout: Aya Gold and Silver Inc. AYA-T, a Quebec-based silver producer with operations in Morocco, has risen 43 per cent over December alone, stretching the stock’s gain to 80 per cent since the start of the year.
Part of this surge is related to Aya itself.
The company has reported encouraging numbers related to silver-production forecasts, mine lifespan and cost structure at its Zgounder operation in Morocco – meaning its expansion there has dovetailed nicely with rising demand for silver.
“Overall, the Aya story is playing out as we had expected, as one of the companies with the highest leverage to silver prices,” Cosmos Chiu, an analyst at CIBC Capital Markets, said in a note this week.
Silver has been playing a big role too.
The spot price touched a new high at more than US$67 an ounce on Friday, up 130 per cent since the start of 2025 in a steady climb that has outpaced the 66-per-cent rise in gold over the same period.
Silver’s allure goes well beyond its reputation as a safe asset (gold’s calling card) or its importance in jewellery (gold again).
More than a pretty metal, it has been swept up in next-generation industrial applications for everything from renewable energy to electric vehicles to artificial intelligence data centres – a red-hot offshoot of the AI phenomenon – where silver is an important input.
Silver quietly outperforms gold for precious metal podium
Overall demand for silver has risen 16 per cent since 2016, according to The Silver Institute.
Over the same period, total supply has fallen 3 per cent, creating a deficit that has underpinned the run-up in the price of silver.
The bullish case goes like this: Demand will remain robust while mine expansion takes time to catch up, leaving silver prices elevated and producers wildly profitable.
If the price of gold continues to rise – as central banks diversify their reserves, and investors lose faith in fiat currencies because of swelling government deficits – the price of silver will follow.
But some doubts are creeping in, relating to a silver rally that may be out of line with fundamentals.
Investors have been jumping into exchange-traded funds that hold silver bullion in an attempt to score directly from rising prices, creating extra demand that could be distorting the market.
“We suspect that the extreme pace of price increases is being mainly driven by market exuberance from the gold rally spilling over into the silver market,” David Oxley, commodities economist at Capital Economics, said in a note.
The iShares Silver Trust, which is sitting on 16,000 tonnes of silver in an ETF easily accessed by regular investors, has seen its bullion holdings rise 10 per cent this year as investor interest rises, according to filings.
That marks a stark reversal from the past four years, when silver funds were net sellers of silver, according to a recent report from ETF.com.
Mr. Oxley forecasts that the price of silver will decline to US$42 an ounce by the end of 2026, implying a decline of about 36 per cent over 2026.
His reasoning rests on the price of gold also declining next year as that rally fizzles and investor interest in ETFs starts to unwind.
Silver could be hit harder because the gold/silver ratio – a comparison between the price of the two precious metals over time – has recently fallen toward a five-year low of about 66, down from more than 100 in April and May, according to Bloomberg data.
A return to a ratio of about 80 – a rough average over the past five years – would likely be driven by a decline in the price of silver.
Yes, there are a lot of moving parts here.
If the artificial intelligence boom goes on and on and the pace of data-centre expansion continues without a stumble, silver could maintain its newfound status as an AI play.
That will surely support the price and feed investor interest in silver producers.
But there’s a risk in getting too comfortable with the precious metal: Like gold, the attraction has become less about the commodity’s usefulness and more about its impressive momentum.
And if the history of commodities teaches us anything, momentum doesn’t last forever.