After lurking in gold’s shadow throughout much of the current precious metals bull market, silver is finally having its moment in the spotlight. It seems that silver’s unique “dual nature” as both a classic safe-haven monetary metal and critical industrial metal is largely optimized right now…prompting not only silver’s outperformance of gold so far in 2025 but also raising speculation that it could represent the superior metals allocation through at least the near term.
It’s not unusual, of course, for gold to outshine silver whenever the precious metals bull decides to make another charge. Gold’s longstanding reputational dominance as the premier hedge metal means many will tend to think of it first as a refuge during the periods of heightened economic and geopolitical uncertainty that frequently set the metals bull off and running.
There’s something else: silver’s demand as an industrial metal, which accounts for roughly 55% of its overall demand. While having two different fundamental demand sources might seem particularly advantageous for an asset, it can be a complication in the case of silver. That’s because the worrisome conditions which can spark interest in silver as a safe haven will tend to hurt the economic growth likely to drive its industrial demand.
It is, in fact this potential for silver’s significant demand by numerous industries to act as a headwind to its safe-haven demand that’s viewed as another key reason for its underperformance, relative to gold, in recent years.
All of that said, there are times when silver’s dual demand sources manage to thrive at the same time. And when that happens, the result can be a double-barreled silver surge, one so great it powers the white metal past its more acclaimed counterpart.
“Perfect Storm” of Silver Activity Has Metal Sitting on the Doorstep of $40
That “perfect storm” of silver activity appears to be what we’re witnessing right now. On the strength of its two most fundamental demand sources, silver recently surpassed $39 per ounce for the first time in nearly 14 years. And while the price has since beat a modest retreat to around $38.50 per ounce, the metal’s fresh wave of energy has put it up about 32% year-to-date, slightly ahead of vaunted gold, which has risen 28% over the same period.
Explaining silver’s continued aappeal as a safe-haven asset in the current climate, Solomon Global analyst Nick Cawley said, “Currency debasement typically drives investors toward hard assets, and silver and gold have benefited from this trend. The dollar’s weakness stems partly from ongoing concerns that U.S. inflation may remain sticky due to proposed tariffs and other policy measures.”
“These inflationary fears have triggered a renewed surge in demand for safe-haven currencies and precious metals,” Cawley added. “Investors are increasingly seeking protection against potential currency devaluation and purchasing power erosion, making silver an attractive hedge against economic uncertainty.”
Inflows Into Silver ETPs This Year Have Already Surpassed 2024 Totals
Inflows into silver exchange-traded products (ETPs) certainly tell that story, at least in part.
Noting that “heightened geopolitical and economic uncertainties, along with positive price expectations, spurred silver investment in the first half of 2025,” The Silver Institute recently reported that silver ETPs saw net inflows of 95 million ounces in the first half of this year…more than the total inflows received by the securities for all of 2024.
According to other observers, silver’s industrial demand also is going a long way to supporting prices this year…demand cued in large part by a big uptick in semiconductor sales.
Semiconductor Surge Is Another Powerful Real-Time Silver Driver
“Semis sales reached a record high in 2024 and are expected to show double-digit growth this year, according to the Semiconductor Industry Association (SIA),” analysts at German global technology company Heraeus recently explained. “Year-to-date, semis sales are well ahead of last year, with May 2025 sales of $59 billion nearly 20% higher year-on-year. This follows an increase in global revenue of 19.1% year-on-year in 2024.”
Connecting the dots to silver demand directly, the Heraeus analysts added:
“The rapidly expanding semis market, driven by AI and cloud infrastructure advances, indicates the electronics market is currently strong, which should see silver demand in electronics rise this year. This may be enough to offset the expected decline in silver demand in solar PV (photovoltaic) applications this year and should have a positive price impact.”
Structural Case for Silver Continues to Improve
Together, the stronger embrace of silver by investors who recognize the utility of a cheaper safe-haven alternative…as well as the sustained benefit to silver industrial demand energized by the manic growth of knowledge technologies…enhance the viability of a longstanding but unfulfilled structural case for the white metal.
It’s a structural case long rooted in a variety of highly regarded drivers, including:
- the accelerating global move to silver-critical renewable energy;
- a silver supply deficit now in its fifth year;
- and persistent economic, fiscal and geopolitical uncertainty, which is conducive to heightened investor interest in real assets possessed of naturally occurring safe-haven properties.
Should the accumulation of additional key silver drivers – such as the current and expected future growth of the semiconductor market – continue in the face of deglobalization, the resulting assembly likely will serve to further strengthen the metal’s existing robust structural outlook. Importantly, it could pave the way for silver to keep benefiting simultaneously from both safe-haven-specific and industrial-specific supports. And if that happens, it would be reasonable to expect silver to climb back into price territories unseen for decades.
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