Silver Shines Again: The Understated Metal Surpassing Gold

An Ancient and Volatile Monetary Metal

In the collective imagination, silver remains in the shadow of gold. However, its monetary role is deeply rooted in history. Used as currency since antiquity, it was far more prevalent than gold as a standard of reference for several millennia: from 3000 BC until the end of the 19th century, it was indeed silver that structured exchanges in most great civilizations. The economist Milton Friedman strongly emphasized that « the primary monetary metal throughout history has been silver, not gold."

Its widespread use, linked to a face value significantly lower than gold, explains its universal adoption. Accessible, divisible, and abundant in the domestic economy, silver has always circulated much more widely. It is precisely this dual nature—monetary metal and industrial metal—that makes it a unique asset today.

Like gold, silver is considered a safe haven asset. It reacts to the same drivers: expectations of interest rate cuts, a weakening dollar, concerns about US public finances, and geopolitical tensions. In 2025, the rise in gold prices—which set a series of records, peaking at $4,381 an ounce in October—naturally impacted the price of silver. But with greater intensity, as its market is smaller and therefore more volatile. It climbs faster… and can adjust more quickly.

This pattern confirmed itself this year: on October 17, silver reached $54.48 an ounce, an unprecedented level, surpassing its previous record from January 18, 1980, of $49.45. This is a strong symbol for an asset long viewed as a byproduct of gold's dynamics.

A Structural Shortage

If silver is becoming emancipated, it is primarily because its market is experiencing a rare phenomenon among commodities: a structural supply deficit. Global stocks are dwindling because silver is consumed more quickly than it is produced or recycled. Unlike gold, which is mass-stored and rarely destroyed, silver quite literally vanishes in its industrial uses.

Over 60% of global supply is dedicated to these uses: it is the metal with the highest electrical conductivity properties, an effective catalyst, and a critical component of modern technologies. Silver is everywhere: in smartphones, semiconductors, solar cells, water purification systems, touch screens, electric vehicles, and radar systems. These are all sectors experiencing structural growth, where it is technically impossible to replace silver in the short term.

Industrial demand rose by 4% in 2024, reaching 680.5 million ounces, marking a record for the fourth consecutive year. Meanwhile, mining production and recycling have not kept pace, creating a deficit that is establishing itself as a long-term trend. The Silver Institute confirms that total demand has exceeded supply for four consecutive years, an unprecedented phenomenon in terms of duration.

This tension is compounded by a strategic observation: unlike gold, silver does not have significant strategic reserves. Central banks have been buying gold for several years to strengthen their balance sheets, but they do not accumulate silver. Therefore, the white metal lacks any institutional buffer in case of a demand shock, which heightens its sensitivity to industrial cycles.

Adding to this fundamental dynamic is a market factor: traditional investors are still relatively absent. Specialized silver ETFs remain below the records of 2021, and gold funds are also below their 2020 peaks. It is mainly hedge funds and futures market investors that fueled the rally of 2025. Specialists at Jupiter AM view this situation as a temporary anomaly: according to them, the rise in monetary metals has not yet been fully embraced by generalist investors.

Strategic and Forward-Looking Hybrid

In this context, silver emerges less as « the poor man's gold » and more as a hybrid asset, serving both as a monetary safe haven and a critical industrial resource. This duality, diverging from historical narratives, accounts for its current trajectory: more volatile, more exposed, but also potentially more rewarding in a world where technological demand is intensifying.