Is Silver the Smartest Buy in the Market Right Now?
source: IronFX
Key Silver Investment Thesis
Undervalued vs. Gold: ~$2T in total silver vs. $22T+ in gold. Ratio suggests room for mean reversion.
Industrial Demand Boom: Solar, EVs, AI/5G, and batteries driving sticky demand.
Structural Deficit: Mine supply can't keep pace with rising use.
Speculative Reawakening: Funds and retail piling back in post-breakout.
Geopolitics & De-Dollarization: Tailwinds from global instability and central bank moves.
Fat Margins for Miners: Spot at $38 vs. AISC at $26–32.
Technical Breakout: Cleared $35 ceiling; $41–50 next 12-month target.
Policy Risks to Supply: Mexico's proposed royalty hike could crimp future output.
I’ve watched silver play the understudy to gold for over two decades. But that dynamic may be shifting—fast.
Gold’s surge was fueled by silent central bank buying—especially across Asia. Silver didn’t get the memo. But the tide is turning as investors eye silver's deeply discounted value relative to gold. The gold/silver ratio still hovers near 88. Post-GFC average? 68. A reversion implies silver at $50+ if gold holds $3,400.
Silver is no longer just a monetary hedge—it’s industrial glue. Solar will absorb 14% of total silver demand in 2025, up from just 5% ten years ago. EVs are pulling in another 600 tonnes a year. AI data centers, 5G, and solid-state batteries are creating non-price-elastic demand—silver is now embedded in technologies that can’t function without it.
Silver-backed ETPs added 95 million ounces in the first half of 2025—already beating all of 2024. Managed money net longs hit 60k contracts—the most since 2021. The July breakout above $38 re-lit retail interest. Yes, Silver Squeeze 2.0 chatter is back. And unlike meme-era noise, this time it’s got fundamentals behind it.
Geopolitical flareups, trade friction, and de-dollarization keep the “hard asset” bid alive. The U.S. debt spiral means the Fed may be forced to re-monetize, weakening the dollar and boosting real assets. Gold benefits first—but silver, the high-beta play, follows fast and hard.
Technicals just confirmed it: Silver broke out above its 13-year cap at $34. That opens the runway to $41–50 over the next year. Support sits strong around $34.8. With most miners producing below $32/oz AISC, margins are fat—but new supply isn’t coming fast due to capital cost inflation and permitting hurdles.
SLV trades at ~$33.59, near its 52-week high of $35.72. Assets under management sit around $16.5B. The ETF is physically backed, with daily liquidity and tight spreads. Expense ratio is 0.50%. While it pays no dividend, SLV remains the go-to vehicle for both institutional and retail silver exposure.
It’s also lean. No debt, no leverage, no yield drag. Just a warehouse of silver tracking spots minus fees.
I’m overweight silver—via SLV as the physical silver market is getting tight. This isn’t a shiny-object trade. It’s a calculated bet on mean reversion, sticky industrial demand, and fiscal disorder. Watch the breakout. And don’t blink.
SCC Rating: 81% We recommend buying the iShares Silver Trust (SLV)
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Risk Disclosure: This content is for informational purposes only and does not constitute investment advice. Investing carries risk, including potential loss of principal. Always consult with a professional financial advisor to evaluate your risk tolerance and financial goals before making any investment decisions.
