Investing in silver this year has been a lucrative bet, with the precious metal well outperforming the stock market, gold, and cryptocurrencies such as bitcoin.
Much of the gains have come in just the past few months, and while the explosive rally appeared to reverse a bit to start the week, investors have seen triple-digit returns on silver over the past year.
THE TOP ECONOMIC POLICY DEVELOPMENTS OF 2025 THAT WILL SHAPE THE YEARS TO COME
Silver prices dropped more than 7% on Monday, although, as of Monday, have increased by over 20% in the past month and nearly 97% in the past six months. The price of silver has ballooned 142% from a year ago.
An ounce of silver cost just over $29 a year ago, but the same ounce of silver is now trading for more than $71.
Notably, silver has outperformed gold, which has also increased in value over the past year. Gold prices have increased by over 66% from a year ago, well below the returns being notched by silver.
Much like gold, silver can be seen as a safe-haven asset that investors flee to when there is geopolitical turmoil or uncertainty about the global financial system. Campbell Harvey, a professor at Duke University’s Fuqua School of Business, pointed out the dynamic and noted that people might now be paying more attention to metals other than gold.
“It’s important to realize that gold is not the only game in town,” Harvey told the Washington Examiner.
“For safe-haven status, many people narrowly focused on one metal — gold,” Harvey said. “And given that many have added to their defensive portfolio or safe-haven portfolio, they’re thinking of diversifying across other metals in the category.”
Desmond Lachman, a senior fellow at the American Enterprise Institute, told the Washington Examiner that he thinks there are two factors driving silver’s meteoric rise. One is that it is rising as a safe-haven asset alongside gold, albeit at a faster clip, but the other is what separates it from gold: its practical and industrial uses.
“Silver is increasingly used in modern industry, [for] things like solar panels, electric vehicles, and so on,” Lachman said.
Steve Swedberg, a finance and monetary policy analyst at the Competitive Enterprise Institute, pointed out that electric vehicles use double the amount of silver as traditional cars, and, in addition to solar panels, artificial intelligence data centers also use the precious metal.
Because silver prices have risen so much recently, these cost increases might be felt in products that use silver as an input. For instance, the price of solar panels could end up increasing because the overall value of silver keeps rising, too.
“What’s been occurring, that’s been occurring over a couple of years, is that demand has outrun supply, so they’ve had to draw down inventories,” Lachman said. “So that is giving it added fuel, that it’s in demand for industry. It’s not like gold, which is basically more speculative or more for holding as an asset.”
Also, China, which is one of the largest producers of silver in the world, is set to impose new export curbs on silver starting on Jan. 1, 2026, which could further hamper supply.
Tesla CEO Elon Musk commented on the developments on X last week.
“This is not good. Silver is needed in many industrial processes,” Musk replied to a user, pointing out that China will start requiring companies to have government licenses to export silver from the country.
And the industrial demand isn’t expected to wane anytime soon. The Silver Institute released a report earlier this month that predicted higher industrial demand through 2030.
“Silver’s superior electrical and thermal conductivity properties are increasingly essential to the technological transformation driving the global economy,” the group said in a news release. “As a result, global silver industrial demand is poised to grow further as demand from vital technology sectors accelerates over the next five years.”
CRYPTOCURRENCIES LOOK FOR COMEBACK FROM FRIENDLIER REGULATION IN 2026
And at the same time, investors fearing inflation or an economic downturn are also looking at silver as a safe-haven investment, alongside gold.
“People think the dollar is pretty lousy, that U.S. fundamentals are pretty bad, that there’s fear about inflation, they fear about geopolitical stuff, so people go into safe-haven assets like gold and silver, but silver’s got the added kick,” Lachman said.
