Can silver get even crazier? Stocks depleted, gold-silver ratio collapsing, veteran analyst calls for a sky-high price of $300

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Driven by structural supply shortages and strong industrial demand, silver is becoming one of the most eye-catching trading targets in 2025.

As one of the most dazzling asset classes of 2025, silver futures prices have already soared 154% this year, with an approximately 40% increase this month alone based on continuous futures contracts. This unstoppable surge not only outperformed the stock market during the same period, but has also attracted widespread market attention. UBS strategists warned clients this week, saying that the recent jumps in precious and industrial metals appear “out of control.”

Renowned silver analyst and author of “The Great Silver Bull,” Peter Krauth, believes that although there are still short-term correction risks, prices have the potential to hit a historic high of $300 per ounce in the coming “mania phase.”

He believes that the current rally is mainly driven by supply-demand fundamentals imbalance, and all the factors necessary to sustain the rally for “quite a long time” are already in place. Although $50 per ounce has been regarded as a new price floor, Krauth emphasizes that as the market enters the “mania phase,” drastic adjustments to the gold-silver ratio will become the core driving force behind rising silver prices.

Supply-Demand Fundamentals: Structural Deficits Support Long-Term Bull Market

Krauth believes that the core logic for the explosive surge in silver prices this year is the market’s reassessment of long-term structural deficits. He points out that the cumulative deficit of the past five years (including this year) is about 800 million ounces, which is nearly equivalent to one year’s total mine supply. The international industry association The Silver Institute predicts that this deficit situation will persist for the next five years.

Recently, Krauth stated in an interview with Ben Mumme, founder of Living Your Greatness Podcast, that as early as 2024, due to sharp declines in inventories at major exchanges such as London, New York, and Shanghai, market fundamentals have undergone a qualitative change. At that time, consumers could obtain physical silver by withdrawing futures contract delivery, without forcing miners to increase supply. Now, as exchange inventories are exhausted, the market is forced to confront this severe supply gap.

On the demand side, huge consumption by solar panel manufacturers constitutes the main force for industrial demand, and newer, more efficient technology will further increase silver usage. In addition, investment demand has far exceeded expectations. According to data from The Silver Institute, this year, investment demand for silver-themed ETFs is expected to reach nearly 200 million ounces, far exceeding the previous forecast of 70 million ounces.

“Mania Phase” and the $300 Target Price Logic

Krauth’s calculation for the $300 target price is based on a significant correction to the “gold-silver ratio.” This ratio, which is gold price divided by silver price, represents the number of ounces of silver needed to buy one ounce of gold. The ratio reached a peak of 104 this April, and has fallen to around 68 now. Krauth predicts that in the coming “mania phase,” the ratio will plummet to 15.

According to his model, if the current gold price is about $4,500 and divided by a gold-silver ratio of 15, the target price for silver is $300. Although there are more aggressive forecasts in the market (such as $800 to $1,000), Krauth believes these numbers are “fairly crazy,” and his prediction path is more robust by comparison. He adds that it may take “several more years” to reach $300.

Aside from supply-demand imbalance, a weakening dollar, high government deficits, inflation concerns, and geopolitical risks are also important factors fueling the precious metals boom. However, Krauth warns that investors may not yet fully grasp the depth of this supply-demand imbalance.

For the short-term trend, Krauth remains cautiously objective. He points out that although silver is in an excellent market position and has broken through and confirmed the $50 bottom support in October, it does not mean the market will not experience corrections. “A slight correction in the near term would not surprise me,” Krauth said, but he is confident that the key elements supporting the rally will continue to play a role for quite a long period into the future.

Risk Warning and DisclaimerThe market carries risks and investments should be made cautiously. This article does not constitute personal investment advice, nor does it take into account the specific investment goals, financial situation, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk. ```