Disseminated on behalf of Sierra Madre Gold & Silver Ltd.
In December 2025, silver prices experienced a remarkable surge, capturing the attention of investors, industrial users, and mining companies alike. On December 9, the spot silver price broke through the significant barrier of US$60 per troy ounce, marking a historic high for the metal. This surge is not merely a fleeting moment; it reflects deeper trends in the global silver market that have been developing over the past several years.
Five Years of Shortage: Why Silver Supply Can’t Keep Up
The recent rally in silver prices is underpinned by a persistent supply deficit that has plagued the global silver market for five consecutive years. According to the 2025 World Silver Survey by the Silver Institute, the global silver market is expected to face a deficit again this year, continuing a trend of structural shortfalls.
Mine production has remained largely stagnant, with total mined silver supply in 2025 projected to be around 813 million ounces, consistent with previous years. While recycling contributes some additional supply, it is insufficient to bridge the widening gap between supply and demand. This imbalance is a significant factor driving the upward pressure on silver prices. As one analyst noted, silver is “quietly outperforming gold” due to these structural deficits and increasing demand from renewable energy and industrial sectors.
Rising Demand: Industry Needs + Investor Interest
The demand for silver is multifaceted, driven by both industrial applications and investment interest. Industrial use, particularly in electronics, photovoltaics (solar panels), and green technology, has reached record levels. The 2025 survey indicates that industrial fabrication of silver has surged, buoyed by strong demand from these sectors.
Simultaneously, investment demand has skyrocketed. Many investors are reallocating their portfolios to include silver, attracted by its dual role as an industrial commodity and a hedge against macroeconomic uncertainties, inflation, and currency volatility. Since the beginning of 2025, silver has nearly doubled in value, significantly outpacing other precious metals, including gold.
The Supply Crunch and Why Prices Keep Rising
The year 2025 has witnessed sharp gains for silver. From the start of the year, silver’s price more than doubled as market conditions tightened and demand surged. By late November and early December, spot silver was trading in the upper $50s, with intraday highs reaching or exceeding $58.84 per ounce. The breakout to the $60 level on December 9 marked a new peak, and by December 11, silver extended its gains, touching an intraday high of $64.2062 per ounce—a new all-time high.
What’s Behind the Surge?
Several converging factors support silver’s rally:
Persistent Supply Deficit: Mine production stagnation coupled with growing demand, especially from industrial sectors.
Strong Industrial Demand: Increased needs from renewable energy, electronics, and emerging technologies that utilize silver’s unique properties.
Investor Demand and Macro Trends: Economic uncertainties, inflationary pressures, and potential interest-rate shifts have led to renewed interest in silver as a hedge and store of value.
Structural Constraints on Supply Growth: Silver is often a by-product in mining operations for other metals, meaning that higher prices do not always lead to a proportional increase in supply.
Analysts Speak: What’s Next for Silver in 2026
Industry forecasters predict that the silver deficit will continue into 2026. The Silver Institute anticipates ongoing deficits, with the projected shortfall for 2025 alone estimated at approximately 117 million ounces (3,660 tonnes)—one of the largest in recent years. While some analysts foresee narrowing gaps, the persistent structural imbalances from stagnant mine production and record industrial demand will likely keep upward pressure on prices.
Rising demand from green technologies, industrial use, and investment is driving this rebalancing. Major financial institutions, including Bank of America, have raised their 12-month silver price target to $65 per ounce. Some analysts, like those at BNP Paribas, suggest that silver could reach as high as $100 per ounce by the end of 2026 as investors seek safe-haven assets amid ongoing inflation and geopolitical risks.
Potential Pitfalls: Risks That Could Stall the Rally
Despite the strong rally, the silver market is not without risks. Industrial demand, particularly from sectors like solar energy, may slow if companies find cheaper substitutes or reduce silver intensity due to rising prices. Some analysts predict a decline in silver demand this year compared to previous years.
Investor demand could also wane if macroeconomic conditions shift—such as rising interest rates or subsiding inflation—making non-yielding metals like silver less attractive. Market sentiment and speculative flows remain significant variables. Additionally, while the structural supply deficit is real, potential supply responses (mine expansions, recycling, and substitution) could eventually alleviate tightness, although such adjustments typically lag behind price movements.
Beyond Investors: Silver’s Role in Industry and Green Tech
The surge in silver prices has implications beyond the investment community. Industries that rely on silver—such as electronics, solar energy, and medical devices—may face rising cost pressures. Conversely, mining companies, particularly those with high-grade, efficient operations, stand to benefit significantly.
For the broader global economy, silver’s rally signals a renewed interest in “real assets” amid inflation, interest-rate uncertainty, and structural shifts toward renewable energy and clean technology. Silver is emerging as a strategic material once again.
Amid this tightening market and rising prices, attention is turning to producers capable of delivering high-grade, reliable silver supply, including Sierra Madre Gold and Silver, whose projects exemplify the type of production needed to meet growing industrial and investor demand.
Mexico’s Hidden Gem: Sierra Madre Gold and Silver
Sierra Madre Gold and Silver (TSX-V: SMV | OTCQX: SMVVF) is emerging as a key silver producer in Mexico. The company operates two major projects, both contributing to the global silver supply amid ongoing deficits.
La Guitarra Mine (State of Mexico)
La Guitarra, acquired from First Majestic Silver Corp., is a fully permitted and producing underground mine. Commercial production began in January 2025 at 500 tonnes per day, with expansion plans targeting up to 1,500 tonnes per day by 2027. This project aims to restore one of Mexico’s historically significant silver mines to prominence, providing immediate cash flow and operational experience for Sierra Madre.
Tepic Project: High-Grade Epithermal Gold-Silver Potential
The Tepic Project features a high-grade epithermal gold-silver deposit with extensive near-surface mineralization, offering significant exploration upside and multiple pathways for scalable development. The company’s leadership team comprises experienced mining professionals with a proven track record in developing large-scale silver projects, instilling confidence in execution and operational efficiency.
Why Silver May Be the Strategic Metal of the Year
Together, Tepic and La Guitarra position Sierra Madre as a potentially significant silver supplier during a period of constrained global supply. The projected annual production from Tepic, combined with La Guitarra’s ramping output, demonstrates how high-grade, reliable projects can support industrial demand, renewable energy expansion, and investor appetite for silver.
With silver prices breaking historic highs and the global market facing its fifth consecutive year of deficit, the spotlight is firmly on both supply and demand dynamics. Industrial growth, renewable energy adoption, and investment inflows continue to drive demand, while constrained mine output and structural supply limitations keep the market tight.
Companies like Sierra Madre Gold and Silver exemplify the type of high-grade, reliable production needed to stabilize supply chains, support industrial growth, and meet investor demand. In this environment, silver’s role as both a critical industrial metal and a strategic investment asset has never been more pronounced, signaling that the rally may have staying power well into 2026 and beyond.
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