Is silver a good investment?

Even in the context of a standout year for precious metals, silver shone brightly in 2025, outpacing gold and rising by almost 140% over the course of the year in US dollar terms.

That momentum has continued into this year with the silver price surging past $100 an ounce for the first time ever. At the time of writing, the metal is trading at around $115 an ounce.

So, what’s going on? Why has the silver price suddenly, after decades of pretty much going nowhere, rapidly ascended?

Why is silver attractive to investors?

For much of human history silver has – like gold – been used as money. There is only a certain amount of it in the earth’s crust and digging it up and processing it requires labour, so an accepted value can be ascribed to it. 

As with gold, investors sense silver has a timeless value that can be expected to retain its spending power over the long term. This is in contrast to currencies, such as Pounds and Dollars, where supply is expanded through the issuing of debt and their worth is therefore debased over time.

Silver’s latest surge coincided with the price of gold passing $5,000 per troy ounce, with both metals benefitting from a rush towards “safe haven” assets amid geopolitical tensions, a weakening US dollar, and concerns around rising levels US government debt.

Yet silver isn’t just a monetary metal. Its status as such has been diluted by the fact that it’s often a by-product of mining other metals, creating a constant supply for its many industrial uses such as in electronics and chemicals. 

But in the modern era, silver has taken on even greater importance as one of the substances that the industries of artificial intelligence (AI), clean energy, and defence simply can’t do without. And, as an increasing number of solar panels, electric vehicles, and AI data centres are built, the supply of silver is struggling to keep pace with demand. This is mainly due to a lack of significant investment for years.

As with many commodities, supply and demand for silver is cyclical. This can lead to vicious upswings and downswings in price. And while the supply of silver has lagged demand for a few years, the price didn’t move much until midway through last year when it aroused from its slumber. Silver, the bulls argue, simply has a lot of catching up to do – hence the violent surge.

It could have further to run, but it could just as easily fall sharply if the supply-demand equation is perceived to alter. For example, on global growth concerns, or simply if sentiment changes course in the short term.

Is silver a good investment?

One factor when considering whether it’s better to invest in gold or silver is the gold-silver ratio, which denotes how many ounces of silver are required to buy an ounce of gold. Following silver’s catch up over the past six months, the ratio is around 50. That’s low versus history, suggesting that it’s somewhat overvalued compared to gold at the moment. However, if an industrial supply-demand imbalance is driving the price silver could continue to outpace gold – at least in the short term.

At this point I must stress that investors need to be very careful when considering silver. It’s highly speculative and given the combination of influences on its price it has deservedly earned a reputation as the ‘devil’s metal’ – whose aggressive movements are hard to fathom. 

Investing in precious metals and commodities more widely, and in sensible quantity, can be a good way to diversify a portfolio and offset any inflation created by rising raw materials prices. But it’s important to take a broad and long-term investing approach. Any single commodity – especially a niche one such as silver – can experience brutal price swings and a gung-ho approach can leave an investor horribly exposed to losses.

How to invest in silver?

Physical silver can be bought as silver bullion coins or bars and held personally, though these can attract VAT and typically incur significant dealing costs.

A more convenient way to invest in silver is through an Exchange Traded Commodity (ETC). An ETC is similar to an ETF (Exchange Traded Fund), but it aims to track the price of a particular commodity, as opposed to the prices of a range of investments. Gold and silver ETCs can be bought and sold through a stockbroker or investment platform such as Charles Stanley Direct. And if you are fortunate enough to make a profit it will be tax free in a Stocks & Shares ISA or SIPP account.

Buying shares in silver mining companies is another way to gain exposure to the metal. However, this tends to be even riskier than a silver ETC. While changes in silver prices will directly impact the profitability and the share prices of silver miners, they are also exposed to other operational factors such as local regulations and conditions. Overall, miners tend to be operationally geared to the silver price, which means they can magnify the gains – and losses – of an already highly volatile commodity.