(Reuters) – Silver has soared to the key milestone of $35 per ounce, reaching its highest level in more than 13 years, propelled by robust industrial demand and ongoing supply deficits, analysts said.

Spot silver rose 2.5% to $35.82 per ounce as of 1347 GMT, having touched its highest level since February 2012 at $36.08.

“We have been expecting silver to close its performance gap with gold for some time. The metal has firm fundamentals, including being in a supply deficit and industrial demand being robust,” said Nitesh Shah, commodities strategist at WisdomTree.

Gold-Silver Ratio

The gold-silver ratio, which reflects how many ounces of silver are needed to buy an ounce of gold, currently stands around 94 – down from 105 in April, when it reached its highest level since May 2020.

A lower gold-silver ratio means silver is gaining value relative to gold.

Given silver’s recent underperformance against gold, “it looks to me that there could be some ratio trading going on now that it’s dipped below the 100 level,” StoneX analyst Rhona O’Connell said.

Robust Industrial Demand

Known both as a safe-haven asset and a vital industrial metal, silver has surged 24% so far in 2025. Industrial uses account for more than half of global silver demand, according to the Silver Institute industry association.

That demand has remained robust despite broader industrial headwinds in the past few years, said Shah, due in part to its role in solar and electrification.

“With all precious metals in positive territory, I guess they are benefiting from similar factors – weaker US economic data supporting the case of rate cuts, which should support industrial demand at a later stage,” said Giovanni Staunovo, UBS analyst.

Meanwhile, gold has surged about 29% in 2025, shattering records multiple times on safe-haven demand, expectations of U.S. rate cuts and robust central bank purchases.

Supply Deficit and Long-Term Outlook

Silver is facing its fifth consecutive year of a structural market deficit, although the deficit is expected to narrow by 21% in 2025, according to the Silver Institute industry association.

“As silver is largely a by-product of mining for other metals, the elevated price will not necessarily drive a lot of new supply. So supply deficit markets may be maintained for longer,” Shah added.

“In the long-term, rising demand for silver as an industrial material means prices could reach $40 or even $50 per ounce,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.