As silver prices surge, is it the next big investment opportunity?

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Silver is not only gaining pace as a store of value but also as a major industrial metal. It is being used more and more in solar panels, electric vehicles, semiconductors, and medical equipment as well. With the growth in clean energy and technology use, the need for silver grows in proportion. This rise in demand brought global investors to silver assets, who are now flocking to silver assets at a rising pace.

Industrial demand is at all-time high levels

Almost 60% of silver's overall demand now originates from industrial applications—a dramatic increase over a period of ten years. Demand in the last year alone from industries such as solar energy and electronics has registered a significant increase. Solar panel production alone has emerged as one of the biggest consumers of silver. With the world's capacity for solar and EV manufacturing set to increase manifold in the next few years, this pattern appears well on its way.

Supply is not catching up with demand

While demand is booming, silver production is considerably stagnant. World mining production has seen very limited expansion, and most silver comes from by-product mining from other metals including copper and zinc. This structural limitation has caused the silver market to see a supply deficit for several consecutive years. Even with increased recycling, supply still lags well behind demand, further tightening the market.

Investor enthusiasm is building

Fuelled by the strong industrial narrative and supply problems, investors have poured significant amounts into silver in the form of physical bullion, exchange-traded products, and mining stocks. Silver prices are up so far this year by over 24% to a 13-year high. With technical charts showing bullish momentum, investors see silver not only as a hedge but also as a bet on long-term growth as it is related to the green transition.

What are the dangers to watch for?

Despite the optimistic mood, silver is as unstable as any metal. It fluctuates more vigorously than gold and may trail behind during periods of international economic uncertainty or dollar strength. Higher interest rates or a slow-down in industrial production may erode demand. Investors should be cautious and not over-venture, especially if they are playing silver as a short-term bet.

Do you invest in silver today?

Silver is becoming a dual-purpose asset—industrial and investment. Its use in green tech and electronics is a powerful long-term case. If you are extremely risk-tolerant and have a diversified portfolio, silver is something you should consider. But as with any commodity, timing is critical. Consider your goals and risk tolerance before doing anything.