Silver traditionally stands in the shadow of gold, but the “minor metal” has recently emancipated itself significantly in the precious metals markets. While gold dominates the headlines,
Silver Compared to Gold
The price of silver has been in a pronounced upward trend since October 2023. Spot silver rose from a low of $20.67 per ounce on October 3, 2023, to a record high of $54.38 on November 13, an increase of around 163 percent. Silver last traded at $53.39, less than a dollar below its peak.
Gold also rose sharply over the same period, but lagged behind. The gold price climbed from $1,813.90 to a record level of $4,381.21 and then fell back to around $4,163.51 – an increase of 142 percent. Silver has thus clearly outperformed gold, although gold is more in the media spotlight due to its role as a store of value and jewelry metal.
Earlier bull phases also show that silver tends to outperform gold in percentage terms. In the rally after the financial crisis in the late 2000s, both precious metals rose significantly, but silver rose much more sharply. The greater leverage of silver is therefore a well-known pattern in the precious metals sector.
The current upswing has also been reinforced by political and monetary policy expectations in the USA. Following the return of Donald Trump to the presidency, market participants expected a looser monetary policy and potentially greater distrust of US government bonds. Central bank purchases and inflows into gold-backed ETFs, bars and coins drove gold demand; silver benefited as a “companion” of gold from this environment, even if the storage of physical silver stocks remains more costly due to the larger volume per value.
Solar Industry Drives Silver Demand
The industrial use is increasingly decisive for the perspective of silver. Silver is an important raw material for electronics and a central element in photovoltaic cells. According to data from LSEG, industrial silver consumption rose to 689.1 million ounces in 2024, after 644 million ounces in the previous year.
The use in the solar industry grew particularly strongly. Silver consumption for solar modules increased from 191.8 million ounces in 2023 to 243.7 million ounces in 2024 – around 158 percent more than in 2020, when 94.4 million ounces were used in this segment. In parallel, the installed solar capacity is growing worldwide: around 600 gigawatts of new capacity were installed in 2024, and estimates suggest that this could be close to 1,000 gigawatts per year by 2030.
The International Energy Agency expects that a total of around 4,000 gigawatts of additional photovoltaic capacity will be added from 2024 to 2030. According to projections, this expansion alone could increase silver demand by almost 150 million ounces per year by 2030. In relation to the total physical demand of 1.169 billion ounces in 2024, this would correspond to an increase of around 13 percent, which essentially comes from a single industrial application.
Especially in the context of the energy transition, silver is thus developing into a strategic material and combines classic precious metal functions with growing industrial importance.
Structural Deficit and Limited Silver Production
On the supply side, the market can only keep pace with this development to a limited extent. For 2024, LSEG reports a deficit of 501.4 million ounces, after only 19.4 million ounces in 2023. The gap between supply and demand has thus increased massively within a year and underlines the structural shortage on the silver market.
A central reason for this is that the majority of silver comes as a by-product from mines whose main focus is on metals such as copper, lead, zinc or gold. Investment and production decisions are therefore primarily based on the profitability of these metals, not on the price development of silver. Even significantly higher silver prices therefore do not automatically lead to a rapid expansion of production.
At the same time, new projects or capacity expansions in the mining industry are generally associated with long lead times. Industry analyses also assume that individual existing silver mines will be closed by 2030. A report published in July on the Mining Technology platform forecasts that global silver production could fall from an expected 944 million ounces in the current year to around 901 million ounces by 2030.
This means that a growing silver demand, driven primarily by the solar industry, is meeting a supply that can only be expanded to a limited extent. In a market that is smaller compared to gold, this means that even additional demand impulses can trigger noticeable price reactions. While gold continues to be regarded as a classic store of value, silver is increasingly establishing itself as a key raw material for the energy transition.
