Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The silver market is set up to outperform gold prices in 2025, according to TD Securities’ Daniel Ghali. The investment bank’s senior commodity strategist outlines a bullish combination of factors putting silver in a “really strong setup,” including robust macroeconomic momentum, structural shifts in silver inventories, ongoing supply-demand imbalances, and investor hedging activity. Although the upward movement could be more volatile than gold’s rally, it may ultimately deliver higher long-term returns.
A Foundation of Macro Momentum
Precious metals boasted a powerful start to 2025 with demand hitting a nine-year high in the first quarter. Throughout the first three months of the year, gold prices surged by over 19%, and silver charted a nearly 18% gain. These elevated prices are supported by a boost in safe-haven demand resulting from a mix of economic uncertainty and geopolitical threats, which have investors on edge.
Silver’s Uniquely Bullish Position
TD Securities’ Ghali acknowledges gold’s leading position in the precious metals boom but emphasizes silver’s uniquely positive setup due to the following factors:
Physical Inventory Shifts (UK → US)
Similar to gold, physical silver has experienced massive outflows from the London Bullion Market Association (LBMA) as investors onshore their investments. During Q1, Britain’s largest bullion vault saw more than a 14% decline in holdings (8.6% in January, 4.5% in February, and 1.5% in March).
This transition was largely driven by proactive purchases related to fears of precious metals tariffs and ongoing supply deficits. Notably, Ghali sees these inventory shifts as permanent, establishing lasting shortages in local markets and fueling higher global prices.
“What’s happening here is an artificial catalyst that has forced London inventories to drain at an exceptional rate in favor of US-based inventory, starting to rise at an incredible rate.”
Industrial Demand vs Limited Supply
Strong demand in the US furthers silver’s optimistic market outlook. Industrial consumption rose by 7% in 2024, and experts expect this trend to accelerate, driven by growth in green energy and a renewed emphasis on domestic manufacturing. “The US just so happens to be a significant end-user destination,” explains Ghali, emphasizing how demand magnifies the impact of these structural inventory shifts.
This consistent demand continues to pressure an ongoing supply shortage, as silver resources struggle to keep pace. Available silver has failed to meet consumption for four consecutive years, creating a persistent shortfall. Analysts project another massive deficit in 2025, and this ongoing imbalance between supply and demand is poised to drive silver prices even higher.
“Invisible Inventories” Held Back
TD’s top commodity strategist concludes his argument for silver as the “most compelling case in commodities markets today” by highlighting the presence of above-ground “invisible inventories.” Put simply, significant amounts of physical silver are privately held by people unwilling to sell at current prices.
As Ghali explains, “Prices actually have to rise in order to incentivize inventory accumulation from unconventional sources.” While these holdings aren’t causing the supply deficit, the reluctance to sell exacerbates the shortage. Ultimately, this creates significant running room for silver prices as the market needs to grow to flood the market with more supply.
Silver Headed for $40?!
TD Securities has a year-end target of $40, representing a 38% surge in silver prices. This projection is slightly above the expert consensus forecast for 2025, averaging around $37. Analysts note that because silver’s price per ounce is much lower, even modest price increases translate into larger percentage gains compared to gold.