Silver price

Silver is a dual-purpose asset: both a precious metal and an industrial raw material. Almost half of annual global use — about 50%, according to the Silver Institute — goes to industrial applications: solar panels (photovoltaic cells), electronics, automotive electrical systems, brazing alloys, medical devices and 5G network components. The rest is split between jewellery, silverware and investment demand, including coins, bars and exchange-traded products. This structure helps explain why silver is more sensitive to the global industrial cycle than gold.

Supply is driven by mine production and recycling. Annual global mine output is around 25,000 tonnes. Mexico is the largest producer, followed by China and Peru. A structural feature of the market is that 70-80% of mined silver comes to the surface as a by-product of copper, lead and zinc mines. Silver supply is therefore tied to base-metals markets and does not respond flexibly to a rise in the silver price. The Silver Institute has recorded a structural deficit in the market for several years, with demand exceeding primary supply.

On the monetary side, silver is influenced by real interest rates, the strength of the dollar and inflation expectations — similar to gold, but usually with larger price swings. Market participants often refer to the gold-silver ratio: the number of ounces of silver needed to buy one ounce of gold. The long-run average is around 60-70, but the ratio can move from 30 to above 100 in extreme market conditions. It is a common reference point for the relative valuation of the two metals.