Silver Price Surpasses $60 per Ounce for the First Time Ever
Silver Banking Balances Quadruple in Just One Year
As international silver prices surge, large sums of money are flowing into silver banking, which is the representative method of silver investment through banks. In particular, as the sale of silver bars has been suspended due to supply and demand issues, attention is shifting toward alternative investments instead of physical silver. Expectations that silver prices will continue to rise are also fueling increased demand for silver investments.
According to the New York Mercantile Exchange on December 12, international silver prices closed at $61.03 per troy ounce on December 10 (local time). After closing at $60.84 per ounce on December 9 and surpassing the $60 mark for the first time ever, prices have continued to climb. On December 11, prices even reached the $62 level. Silver, which was around $28 per troy ounce at the beginning of the year, has soared by more than 100% in 2025 alone. This far exceeds the approximately 60% increase in gold prices during the same period.
The rise in silver prices has been attributed to the U.S. Federal Reserve's interest rate cuts and increased demand relative to supply. On December 10, the Federal Reserve lowered its benchmark interest rate by 0.25 percentage points. This marks the third rate cut of the year and the third consecutive cut. Generally, when the benchmark interest rate falls and the value of the dollar declines, the preference for safe assets such as gold and silver increases.
The supply-demand imbalance is also driving silver prices higher. In China, the world's largest producer and consumer of silver, inventories continue to decline, further heightening concerns about supply shortages in the silver market. In particular, demand for silver in industries such as electronics and solar power is steadily increasing, but mine production has not kept pace, intensifying the supply shortage.
As the supply remains far short of demand, the sale of silver bars has been suspended. Since October 20, sales of silver bars through commercial banks have been temporarily halted.
Under these circumstances, silver banking, an alternative investment method to physical silver, is attracting attention. 'Silver Issue,' launched by Shinhan Bank in August 2015, is the first and only silver account product offered by a commercial bank, allowing customers to purchase silver in gram units without holding the physical metal. At the beginning of 2025, 'Silver Issue' had 16,958 accounts. Over the past two years, the number of accounts increased by only about 400 to 500, but this year it has surged to 25,050 accounts as of December 10. This represents an increase of nearly 10,000 accounts in a single year. The account balance has also steadily grown from 4.77 billion won at the beginning of the year to 16.85 billion won, nearly quadrupling in one year.
Experts believe that, given the global outlook for physical silver supply and demand, silver prices will remain strong into next year. NH Investment & Securities has raised its forecast for next year's silver price range from the previous $40-60 per ounce to $45-70 per ounce.
Hwang Byungjin, a researcher at NH Investment & Securities, stated, "With the Federal Reserve's easing monetary policy leading to a weaker dollar, the price of silver, a tangible asset, has strengthened. While some profit-taking may occur in the short term next year amid concerns about overheating due to the rapid rise in silver prices, which have repeatedly hit record highs, we see the potential for silver to target its all-time highest real value of $70."
Hong Sungki, a researcher at LS Securities, said, "Silver prices have soared more than 20% over the past two months. Silver, which serves as an alternative investment to gold, has benefited from increased demand for gold investment. However, the smaller size of the physical silver market compared to gold, industrial demand, and inventory accumulation due to U.S. tariff policies have continued to drive up silver prices, ushering in a phase of significant volatility."
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