The silver market remains a focal point of speculation, driven by its unique position as both a financial asset and an industrial commodity. As of September 2, 2025, silver spot prices hover around $41 per troy ounce, reflecting a year-to-date increase of approximately 38%, amid escalating geopolitical uncertainties, robust industrial demand, and evolving monetary policies. Keith Neumeyer, CEO of First Majestic Silver Corp., continues to advocate for silver reaching $100 per ounce or higher, citing persistent supply deficits, market cycles, and undervaluation in interviews and analyses. This report examines the interplay of factors that could propel silver toward this ambitious threshold, drawing on comprehensive market data, economic indicators, and expert insights as the head of research at a leading global investment bank.
Historical Context and Recent Performance
Silver prices have exhibited pronounced volatility over the past century, with inflation-adjusted highs reaching over $150 per ounce in 1980 during the Hunt Brothers’ market cornering episode. More recently, silver surged to nearly $50 per ounce in 2011 amid post-financial crisis inflation fears and quantitative easing. In 2020, prices crossed $20 for the first time in four years, peaking near $30 amid pandemic-driven safe-haven buying. By mid-2025, silver achieved a 14-year nominal high above $40 per ounce, driven by supply constraints and industrial momentum, before settling around current levels. Neumeyer’s forecasts, reiterated in 2025 discussions on YouTube and industry symposia, emphasize historical undervaluation relative to gold and anticipate a “supercycle” propelled by structural deficits.
Geopolitical Risk: A Driving Force
Geopolitical instability has historically bolstered silver’s appeal as a safe-haven asset, akin to gold. In 2025, ongoing tensions in Eastern Europe and the Middle East have contributed to price gains, with investors allocating to precious metals amid uncertainty. The China-Taiwan conflict represents a particularly acute risk, with U.S. officials warning of potential escalation and Chinese military drills intensifying regional pressures. An embargo or military engagement could disrupt global supply chains, given China’s dominant role in silver – accounting for roughly 20% of global mine output and significant downstream processing. Escalating U.S.-China trade tensions, with tariffs reaching 145% on Chinese imports by mid-2025, have already reshaped commodity flows and heightened volatility in silver markets. While a stronger U.S. dollar from such frictions may exert short-term downward pressure, long-term supply fears could dominate, potentially catalyzing a price surge.
Industrial Demand: The Silver Catalyst
Industrial applications constitute approximately 59% of silver demand, with projections indicating sustained growth, reaching a record 680.5 million ounces in 2024 and forecasts up to 711 million ounces in 2025. The renewable energy sector is a primary driver: solar photovoltaic (PV) installations have seen demand up 139% from 2016 to 2025. Electric vehicles (EVs) and 5G infrastructure further amplify usage, with EVs potentially requiring substantial silver per vehicle and 5G electronics straining supplies. Silver’s antimicrobial properties also support niche demand in healthcare, including wound dressings and medical devices, though this segment remains smaller at around 1-2% of total usage. Overall, industrial silver consumption is projected to face a structural deficit exceeding 117 million ounces in 2025, underscoring supply pressures.
Potential Embargo on China and Taiwan’s Impact
A hypothetical embargo on China amid Taiwan tensions could precipitate severe supply disruptions, as China holds a production forecast of around 3,300 metric tons in 2024, with similar levels expected in 2025. This would force a scramble for alternatives from top producers like Mexico and Peru, potentially inflating prices through scarcity. Market sentiment alone, fueled by speculation, has already driven safe-haven inflows, while strategic stockpiling by nations and firms could exacerbate tightness. Trade war escalations have similarly impacted silver, with tariffs reshaping flows and boosting volatility.
Challenges and Considerations
Despite bullish drivers, challenges persist. Allegations of silver price manipulation via futures markets and spoofing by bullion banks continue in 2025, potentially capping upside through artificial suppression. Federal Reserve policies, including anticipated rate cuts in September 2025, inversely influence silver: lower rates reduce holding costs and weaken the dollar, supporting prices. Historical resistance levels, such as $50, have prompted profit-taking, as seen in 2011 corrections.
Expert Opinions and Outlook
Expert forecasts for 2025 vary. Peter Krauth envisions long-term potential up to $300 per ounce due to deficits. David Morgan and Gareth Soloway project nearer-term targets around $50, tempered by volatility. Consensus from institutions like UBS, Citi, and JP Morgan points to $35-45 by year-end, with some eyeing $50 amid rate cuts and demand. Neumeyer’s triple-digit view aligns with supply crunch scenarios.
Conclusion
Attaining $100 per ounce for silver is plausible under a confluence of sustained supply deficits, accelerating industrial consumption (particularly in renewables and tech), and geopolitical catalysts like China-Taiwan escalations or trade wars. However, this requires navigating manipulation risks, monetary policy shifts, and historical volatility. Investors should adopt a diversified, long-term approach, monitoring key indicators such as Fed decisions, global demand metrics, and geopolitical developments for strategic positioning in this dynamic market.
