Is now a good time to invest in silver?
Investing in silver can be riskier compared to gold, but with global uncertainty on the rise now could be a good time to buy the ‘devil’s metal’
Alongside bonds, one way of diversifying a portfolio away from equities is through commodities. Gold performed well throughout 2024, hitting new all-time highs and beating several of the major equities indices including the S&P 500 with gains of 27.2% through the year. Gold has continued this momentum through the first half of 2025.
The same is also true of silver to a large extent. Silver prices rose 21.5% last year and are up around 23% so far in 2025. So is now a good time to invest in silver?
There are several factors to consider when deciding whether or not to invest in silver.
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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.
All of that said, 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.”
Silver investors have benefitted this year as geopolitical turmoil creates upward pressure on prices, especially in the run-up to Donald Trump’s tariff regime which saw precious metals shipped to the US in anticipation of higher import costs.
“This rush to secure physical metal depleted liquidity and led to sharply higher borrowing costs, with gold, silver and platinum all experiencing short-term lease rates well into double-digit percentage figures,” wrote Jonathan Butler, head of business development and strategy at Mitsubishi Corporation for the LBMA’s Alchemist.
Is silver worth investing in?
As well as the industries above that have traditionally driven silver demand, Ash also highlights three “boom industries” to which silver is particularly relevant: renewable energy (particularly photovoltaic (PV) solar panels); artificial intelligence (AI), thanks to its use in wiring, connectors and switches; and defence, for the same reasons.
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, and that number is expected to jump by 9% to 711 million ounces in 2024. Electronics, particularly PV solar panels, is the largest driver of increasing industrial silver 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.
“That's less of a risk for investors trading physical bullion at spot prices, but its volatility is still significant,” says Ash. “While that can bring opportunities, it can also leave you nursing losses for extended periods of time.”
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 92.7 at the time of writing. 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.
The picture isn’t that straightforward anymore. The gold-silver ratio topped 112 briefly in early 2020, in response to the Covid pandemic, and while it fell sharply soon afterwards, it has stayed in the mid-70s or higher for the last three years.
“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.”
The longer term trend seems to indicate that the gold-silver ratio is settling at a higher level than it has been historically. “The gold-silver ratio has averaged 68.1 ounces of silver per 1 ounce of gold since NYE 1999. That’s up from 57.1 across the prior 25 years,” says Ash.
Ash puts these elevated levels down to silver no longer serving a monetary purpose, “whereas gold continues to find strong demand from central banks wanting to spread their portfolio risk”.
“Many analysts expect some level of mean reversion in the gold-silver ratio, not least because repeated deficits of silver mining supply versus soaring demand should support if not boost prices for years to come,” he adds. If so, this could support the view that gold is overvalued compared to silver.
In January, Capital Economics published research suggesting that silver will outperform gold over the coming years.
“Given the growing use of silver in fast-growing and non-cyclical sectors, as well as sluggish supply growth, we think silver prices will rise over the next two years, outperforming both gold and the consensus forecast in the process,” wrote Ankita Amajuri, assistant economist at Capital Economics.
Amajuri believes that increased silver use in PV solar panel manufacturing will drive demand for silver in coming years. “Attempts to substitute silver with copper have not seen commercial success so far, and silver appears to be irreplaceable in large-scale manufacturing of PVs for now,” she wrote, citing IEA estimates that global solar PV capacity additions will triple in 2024-2030 based on the six years before this period.
“We expect demand for silver from the photovoltaic industry to make up over 30% of total silver demand by 2030,” she added.
Additional demand drivers are of course AI, which is heavily reliant on silver in its component hardware, including computer chips.
While AI and solar energy drive increasing silver demand, Amajuri argues that “supply will struggle to keep up”. Global production of silver from mines has stagnated since the pandemic, and recycled silver production could be held back by complex technical processes and high costs.
Will the silver price go up in 2025?
Sentiment seems to suggest that silver prices could continue to rise this year, according to a survey from BullionVault. While BullionVault itself doesn’t make commodity price forecasts, it does survey its customers twice annually to gather their views on where gold and silver prices could go.
December’s survey of nearly 1,450 users shows substantial optimism, with respondents predicting that the silver price will reach $36.90, up 27.6% from New Year’s Eve, by the end of the year.
“Investors are now optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt,” says Ash. “Investors are taking the potential of precious metals very seriously as a hedge against risk.”
Investors also took advantage of a plunge in silver prices during April, following Trump’s ‘Liberation Day’ tariffs. The number of investors buying silver on BullionVault more than doubled in April compared to March, according to the company’s data. Combined with a decrease in customers selling silver, that led to an increase in sentiment around silver as measured by BullionVault’s Silver Investor Index to its highest level in over four years.
How to invest in silver
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.
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. Around 7.9% of its portfolio projects primarily mine silver, compared to 88/5% for gold, 1.6% for platinum group metals and 2.0% for base metals.
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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
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