Silver prices reached an all-time high of $54.5 per ounce on 17 October, marking the peak of a rally that saw the metal gain 72% over the preceding 12 months.
But this peak was short-lived, and silver prices quickly fell from the high point, ending 17 October 4.4% below the previous day’s close. The losses have continued from there.
Between 16 October and 27 October the price of silver fell by 13.5%, from over $54 per ounce to just under $47.
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The recent slump in the silver price reflects a decline across precious metals markets, coinciding with a rapid fall in the gold price.
“The selling continues to snowball in gold and silver, barely two weeks after the price reached a record high,” said Chris Beauchamp, chief market analyst at investing platform IG. “The momentum trade in precious metals had delivered the goods in recent weeks, but such rallies often reverse dramatically.”
Anyone investing in gold or silver will have felt these declines keenly. The question is, do the falls mark a stark reversal of the precious metals rally, or do they present a buying opportunity in assets with a known history of volatility?
Despite the recent declines, the price of silver is still 62.6% up through 2025, 39.3% up over the last 12 months (as of close on 27 October). Depending on what happens from here, the recent dip could turn out to be simply a blip in the longer term silver bull market – or the beginning of a rough period for silver investors.
Why invest in silver?
The investment case for silver is distinct from gold. While it is also a precious metal with a rich history of usage in coinage, in the modern era it is silver’s industrial qualities that have the greatest bearing on its price.
“Historically, there would have been a closer relationship between silver and gold in their end uses,” Robert Crayfourd, portfolio manager of the Golden Prospect Precious Metals investment trust, told MoneyWeek. “But today, silver is over 50% industrial, and that’s primarily going into high-end electronics.”
Anything you can see around you with an on/off switch likely contains silver.
Other industrial use cases include brazing and alloys, the chemicals industry and medical equipment – the latter benefiting from the fact that bacteria cannot grow on silver, an inert ‘noble’ metal.
For these reasons, silver sometimes tracks action in copper prices more than gold, though this hasn’t been the case in recent weeks.
Many of the same drivers that impact the gold price – financial stress, interest rates, inflation expectations and policy decisions – also influence silver. “You can think of silver as gold on crack,” says Adrian Ash, director of research at BullionVault. “More irrational, more volatile, more dangerous; but also more fun if you’re looking for risk.”
Is silver a good investment now?
Silver is at the heart of boom industries like clean energy, artificial intelligence (AI) and defence.
The rise of these industries is, potentially, contributing towards an imbalance of supply and demand for silver which should, over the medium term, be positive for the silver price, and make silver well worth investing in.
According to The Silver Institute, between 2016 and 2024 total annual demand for silver increased from 993.3 million ounces to 1.16 billion. Over the same period, supply fell from 1.06 billion ounces to 1.02 billion. In other words, where there was a surplus eight years ago, there is now a deficit.
The boom industries are the main drivers of increasing demand. Total industrial silver demand increased from 491 million ounces in 2015 to a record 680.5 million ounces in 2024. Electronics, particularly PV solar panels, is the largest driver of increasing industrial demand.
One thing to keep in mind when considering investing in silver, though, is its volatility. Futures and options speculators call it “the devil’s metal”, says Ash, on account of its propensity to make sudden, sharp moves just as they think they’ve figured it out.
The recent crash in the silver price is indicative of this volatility. But Beauchamp argues it is nothing for silver investors to be overly concerned about.
“The drop should be welcomed by most investors, both for offering the chance to buy at lower prices and for taking some of the undoubted speculative froth out of the situation,” he said.
Should you invest in silver or gold?
If you are considering investing in a precious metal like silver, you are probably also at least thinking about investing in gold.
The two metals function quite differently as investments. Gold lacks as many industrial applications as silver, but has historically been a more reliable store of value.
Their historical significance as precious metals used in coinage means that gold and silver are often directly compared by investors. The gold-silver ratio is reckoned to be the oldest continually-tracked financial ratio in existence. It describes how many ounces of silver are required to buy one ounce of gold.
The gold-silver ratio is approximately 85 at the time of writing, having fallen from as high as 104 in April at the height of tariff turmoil. Prior to this decade, anything above 80 would have been considered high, indicating that gold was overvalued and that it’s time to invest in silver.
But in recent years it has been more common for gold to trade at higher values relative to silver.
“Central banks have been the primary driver [of precious metal demand],” said Crayfourd. “Central banks are dealing with huge amounts of money and they want a lower volume, so gold is perfect… that has justified gold trading to a higher ratio.”
How to invest in silver
If you view the recent slump as a chance to buy the dip, there are various ways to invest in silver.
You can, in theory, buy physical silver in the form of silver coins or bars. These, however, incur 20% VAT, and also include 10-15% dealing spreads on top.
“Silver’s popularity is likely to keep increasing, along with the demand for silver coins for investment and keepsake purposes,” said Faisel Ali, founder and managing director of Gold Bank London. “Investors still lean towards bullion coins, but we are seeing more and more interest in themed and commemorative coins, so things that actually mean something to the buyer.”
Specialist custodians can enable you to avoid sales tax while cutting this trading spread too. Using a custodian should also save the expense and risk of storing and insuring physical silver on your own property, as they will normally store your silver in a professional level vault.
Alternatively, you can gain exposure to movements in silver prices by buying a physical silver exchange-traded commodity (ETC). An ETC behaves similarly to an ETF, but it tracks the spot price of a particular commodity, as opposed to a bundle of stocks. The iShares Physical Silver ETC (LON: ISLN), for example, tracks the spot price of silver.
Buying shares in silver miners is another way to invest in silver. However, bear in mind that this is a different and arguably riskier investment than in physical silver or a tracker for the spot price, because while changes in the silver price will impact the share prices of silver miners, they are also exposed to other, unrelated factors, such as company mismanagement.
A combination of both these approaches would be to buy an ETF which comprises silver miners, such as the Global X Silver Miners UCITS ETF (LON:SILV). While doing so may dilute some of the company risk associated with buying individual silver miners, this should still be considered a distinct play from investing in physical silver (either directly or via an ETC).
Golden Prospect Precious Metals (LON:GPM) is an investment trust that invests in a diverse portfolio of precious metal miners. As of 30 September, around 11.8% of its portfolio projects primarily mine silver, compared to 85.8% for gold, 1.2% for platinum group metals and 1.1% for base metals.
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