Silver’s Volatility Drives Divergent Price Outlooks ($40-$75) Amid 2025 Record Rally

Silver is trading near its record high of ~$58.63 per ounce as of December 3, 2025, with a 100% YTD gain—its best annual performance since 1979—and significantly outperforming gold (gold-silver ratio at a 4-year low of ~71.8) [1][2]. December 2025 futures are priced at $58.54 per ounce [4]. Bloomberg Intelligence’s Mike McGlone attributes silver’s extreme performance to its ~30% annual volatility, noting this could drive a 1-standard-deviation move of ~$18 from current levels, resulting in a potential range of $40 to $75 per ounce next year [1].

Key catalysts include a 5-year streak of market deficits, driven by robust industrial demand, which has depleted above-ground silver stockpiles [1]. Additionally, the U.S. government’s classification of silver as a critical metal has introduced tariff risks, exacerbating supply-chain turmoil and liquidity issues [1]. Rising economic uncertainty and persistent inflation have also renewed expectations for aggressive Federal Reserve rate cuts, boosting demand for non-yielding hard assets like silver [1][5]. McGlone emphasizes historical precedent: silver’s 1980 peak (never surpassed until 2011) and 2011 peak (followed by a 77% drop to $11.64 in 2020) highlight its tendency for extreme post-rally corrections [1].

1. Silver’s Outperformance
   : The 4-year low gold-silver ratio (~71.8) indicates silver’s relative strength compared to gold, driven by both fundamental supply tightness and speculative investment flow [2].
2. Supply Constraints
   : Five consecutive years of market deficits signal ongoing physical scarcity, a primary driver of the 2025 rally that is expected to persist amid constrained mine production and supply-chain issues [1].
3. Volatility as a Defining Factor
   : Silver’s ~30% annual volatility is a double-edged sword: while it has fueled the 100% YTD gain, it also poses significant correction risk, as seen in historical price cycles [1].

• Risks
  : Silver’s historical pattern of extreme post-rally reversals raises the possibility of a correction to $40 per ounce, especially if Fed easing expectations moderate or supply-chain issues resolve unexpectedly [1].
• Opportunities
  : A bullish scenario could push silver to $75 per ounce, supported by sustained supply deficits, Fed rate cuts, and ongoing industrial demand [1][3]. CoinCodex’s 2025 year-end forecast of $74.50 per ounce aligns with this bullish outlook [3].
• Near-Term Driver
  : The upcoming Federal Reserve meeting (next week) is critical, with a quarter-point rate cut priced as near-certain—this could further support silver prices if realized [5].

Silver is a standout commodity in 2025, with a 100% YTD gain and near-record prices (~$58.63/oz). Its volatility (~30% annual) presents dual price scenarios ($40-$75 per ounce) as highlighted by Bloomberg’s McGlone. Key drivers include a 5-year supply deficit, Fed easing expectations, and its classification as a critical metal. Market participants are closely watching the upcoming Fed meeting for potential near-term price moves.