Silver's performance over the past year has been nothing short of spectacular. Between early September and early November 2025, the metal vaulted to a rally of almost 50%, a surge that eclipsed the gains of virtually every other asset. This meteoric rise was powered by a multi-layered confluence of market conditions. From its deep-rooted correlation with gold to a supply-demand imbalance driven by the global imperative for electrification, AI and crypto mining, multiple forces kicked in simultaneously. Understanding this precise moment of convergence requires a deeper look into both positioning and underlying market psychology.

First, let’s look at silver’s relationship to gold. The gold-to-silver ratio over the last 50 years has averaged approximately 67. This means that, on average, it would take 67 ounces of silver to buy one ounce of gold. That average over the last six years has shot up to almost 84. The reasons for this seem pretty straightforward: the economic panic related to the Covid-19 pandemic caused a rush into what is often viewed as the world’s safest asset, gold. But even as the economic stress subsided, another compelling tailwind for gold emerged.

Global central banks accelerated their stockpiling of the metal as an alternative to holding reserves strictly in U.S. dollars and treasuries. For some perspective on that, in 2017, 64% of the world’s reserves were held in dollars. That number has dwindled to approximately 57%. This shift appeared to accelerate in relation to what some countries viewed as a heavy-handed approach in how the U.S. dealt with Russia in the wake of its invasion of Ukraine. The U.S. orchestrated a freezing of Russian dollar-denominated assets and blocked Russia from participating in the global SWIFT payment system.

Many will make the reasonable argument that these actions were necessary, but that certainly doesn’t mean there can’t be second-derivative ramifications. As economist Thomas Sowell said, “There are no solutions, only tradeoffs.” In this instance, the tradeoff was a global attempt at de-dollarization. Side note: the word “attempt” was carefully chosen and underscores a pervasive belief that there is no legitimate alternative to the safety and stability of dollars and that these attempts may ultimately fail. It’s also worth mentioning that the trade policies probably gave additional motivation for countries to seek a substitute.

The net result was a huge rally in gold that pushed the gold-silver ratio up to a four-year high of 104 in May of 2025. This marked the second-highest ratio in recorded history, the highest being the 120 reading in the immediate aftermath of the 2020 pandemic. An additional tailwind to gold’s rally was a growing belief that the current explosive levels of U.S. deficit spending could have a significant negative impact on the value of the U.S. dollar. This “debasement trade” has been a tailwind to all hard assets, but gold was the biggest beneficiary because of the additional geopolitical factors.