Should the gold medal go to silver?

Jake Coulson, Investment Writer, HANetf

To some, silver exemplifies second place. Despite being a precious metal, used in jewellery, silverware, or stored as bars and coins – it is often compared to its more valuable elder sibling, gold.

But the comparison is somewhat unfair: while around 94% of gold demand comes from jewellery, investment, and central bank purchases, the equivalent figure for silver is just 39%¹.

Most silver demand (61%) comes not from jewellery or its role as a store of value, but from industrial applications². For investors, this raises two questions: why is silver important, and what could growing demand mean for its producers?

An industrial metal

Silver possesses an unusual combination of physical and chemical properties. It is naturally antimicrobial, giving it medical applications, and acts as a chemical catalyst in the manufacture of materials including plastics and synthetic fabrics³.

But more importantly, silver is the most electrically conductive metal on Earth – ahead of copper⁴. It is also thermally conductive and corrosion-resistant, making it valuable in circuitry, electrical contacts, and other components.

Electrification is driving demand

Virtually everything that uses electricity contains silver, from cars and household appliances to laptops and smartphones.

This role is becoming more important as governments and businesses seek to decarbonise by replacing fossil-fuel technologies with electrified alternatives. Electric vehicles generally require more electrical components than conventional cars, while charging infrastructure and renewable-energy systems also rely on conductive materials⁵. Solar is an especially important source of demand, with silver paste used within solar cells.

The advance of artificial intelligence is placing further pressure on electrical infrastructure through the proliferation of power-hungry data centres. Meeting their electricity needs will require significant investment in transmission and generation⁶.

Manufacturers are endeavouring to use silver more efficiently or replace it where possible, particularly when prices rise, but its distinctive properties make substitution difficult⁷.

Supply may struggle to respond

Growing demand does not mean supply will increase at the same rate. New mines can take many years to develop, while deposits must be economically viable at prevailing metal prices⁸.

Silver presents an additional complication: around 70% of global production is obtained as a byproduct of mining metals such as copper, lead and zinc⁹. Production decisions are therefore often driven by demand for these metals rather than silver itself.

Consequently, even a substantial increase in silver prices may not generate a rapid supply response. Recycling can help, but recovering small quantities dispersed across electronic products can be difficult or uneconomical.

This inflexibility has become more significant given recent deficits. Over the past five years, annual silver demand has exceeded supply by an average of roughly 100 million ounces¹⁰. Above-ground inventories can meet shortfalls temporarily, but persistent deficits may reduce that buffer.

What could this mean for silver miners?

If demand continues to outpace supply, competition for available metal could support silver prices. Higher prices can lift miners’ revenues and, where costs remain controlled, produce a proportionally larger increase in profit margins.

Silver-mining shares can therefore provide leveraged exposure to silver prices, but the relationship works both ways: falling prices or rising costs can place greater pressure on profitability.

For investors interested in the theme, one approach is to invest in individual miners. Another is to invest in a silver-mining Exchange Traded Fund (ETF) – this can provide diversified, risk-mitigated exposure across several companies, reducing reliance on any single miner.

In an increasingly electrified world, silver should not be reduced to gold’s less valuable counterpart: it is a strategic material with an important role of its own¹¹.

Investors interested in the theme can explore options available through their investment platform or discuss the different approaches with a financial adviser.

For more information visit hanetf.com.

This material does not constitute a marketing document. It is not an invitation to invest but to be read for educational purposes only. Past performance and forecasts are not reliable indicators of future results.

¹ World Gold Council, 2026; GoldSilver, 2026.

² GoldSilver, 2026.

³ The Silver Institute, 2026.

⁴ The Silver Institute, 2026.

⁵ The Silver Institute, 2025.

⁶ IEA, 2026.

⁷ The Economic Times, 2025.

⁸ Mining.com, 2026.

⁹ Mining.com, 2025.

¹⁰ The Silver Institute, 2025.

¹¹ BullionVault, 2026.