Precious Metals in Focus: Is Silver the Next Gold?

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Researched by Industrial Info Resources (Sugar Land, Texas)--Over the years, silver has transitioned from solely being a symbol of status and wealth to becoming a vital industrial component worldwide. Initially utilized in jewelry, currency and utensils, silver now finds applications across major sectors such as clean energy and artificial intelligence (AI). Thus, the commodity is witnessing an uptick in demand globally, with silver prices surging significantly.

According to data from gold dealer Bullionstar, silver recently surged across the $40 mark with spot silver trading at $42 per ounce, marking its highest level since 2011. Also, silver prices rose more than 40% year-on-year, marking a positive historical performance. This growth is majorly driven by safe-haven buying due to anticipated U.S. Federal Reserve interest rate cuts and a weakening U.S. dollar.

At the same time, strong industrial demand and supply tightness continue to drive silver's bullish prices. Industrial usage from sectors such as electric vehicle manufacturing and solar photovoltaic panels now account for more than half (55%) of the total demand for silver, according to global asset manager Sprott. Furthermore, geopolitical concerns (such as tariff scenarios and shifting alliances) and economic uncertainties (such as inflation fears and currency fluctuations) have pushed investors toward silver.

Its dual capacity of being a precious metal as well as an industrial commodity has widely led to silver's appeal as a dependable investment. Similar to gold but comparatively cheaper, silver has gained traction as a hedge for investors amid rising retail and exchange-traded product inflows. According to the Silver Institute, silver exchange traded funds (ETFs) surpassed overall 2024 levels with fresh inflows of 95 million ounces in the first half of 2025.

While gold retains its safe-haven status with record demand from central banks and ETFs, it has trailed slightly behind silver in recent months. Silver prices climbed 45.5% year-on-year in September--edging marginally above gold by 0.5%.

Supply-side challenges have further sustained the upward momentum of silver prices. The Silver Institute suggests the silver market is undergoing its fifth consecutive year of supply shortages. Global mine output remains constrained as most silver is yielded as a byproduct of base metal mining (such as lead and copper) rather than from dedicated mines (that are limited and small in scale). Other factors such as declining ore quality, elevated costs, labor disputes and technical hurdles have also played their part in shrinking production. Although recycling rose by 6% last year, hitting a 12-year high of 193.9 million ounces, according to the institute, it still fails to offset the growing deficit in global supply.

Industrial Info tracking 241 active capital projects worldwide worth about US$16 billion aimed at silver mining and post-extraction operations. As is typical in the industry, silver is mined alongside other ores such as gold and copper.

By country, Mexico is the biggest driver of investment with a total spend pipeline of around US$5 billion across 85 projects. It is followed by the U.S. with more than US$4 billion across 23 projects and Canada with around US$2 billion across 17 projects. More than US$1 billion is also being tracked outside of Peru. Other countries with significant project spending include Argentina, Bolivia and China.

With an aggregate project expenditure of more than US$3 billion, South32 Limited (Perth, Australia), Endeavour Silver Corporation (Vancouver, Canada), Discovery Silver Corporation (Toronto, Canada) and Hecla Mining Company (Idaho, U.S.A.) are the top players in the market. They collectively hold a market share of about 24%.

Around 59% of the investment is aimed at grassroot projects, 11% is toward plant expansions and about 20% toward brownfield projects and unit additions. Most of these projects are presently in the planning stages, with most of them (134) facing a kickoff slippage of more than two years.

As worldwide demand intensifies and supply scarcity deepens, silver's strategic importance is poised to elevate its status in the coming future. With growing momentum across both industrial and investment landscapes, silver is likely to position itself as the "next gold."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).