Let me kick this off by talking about silver’s real strength in industry. It’s far beyond what most people think of as just a precious metal for rings and necklaces. Its exceptional ability to conduct electricity and heat, combined with natural antibacterial qualities, makes it irreplaceable in high-tech and green applications. Right now, over 50% of global silver use is industrial, and I’m seeing that trend accelerate as we lean into renewables and connectivity in 2025 (Sprott.com). For solar power, silver paste is key for the conductive parts in panels; with worldwide solar additions topping 600 GW in 2024, that could eat up around 232 million silver ounces alone, a solid 20% increase from 2023 (Carboncredits.com). Electric vehicles are ramping up too with silver’s in batteries, wiring, and all the connected tech, so I estimate we’ll need another 20-30 million ounces as EV output grows to over 14 million units, especially with ADAS and 5G features (estimates based on Sprott.com data). In electronics, from smartphones to semiconductors and 5G infrastructure, silver handles switches, inks, and tags with the 5G expansion that might add around 16 million ounces, given the rollout of millions of base stations (Silverinstitute.org). Healthcare is another area where silver shines, literally, in wound care and devices post COVID era. Things like nano-silver for bendable screens or coatings are pushing boundaries. The silver’s industrial demand hit a peak of 680.5 million ounces last year. I expect 2025 to break that, making silver a tech essential in my view. 

Building a stronger portfolio: why silver deserves a spot

In today’s economy, with CPI inflation running at about 2.9%, U.S. debt at $37.5 trillion, and continued instability in mining regions, I’ve long argued that commodities like silver remain crucial to diversify risk and stabilize portfolios. Silver plays a dual role. It serves as a partial store of value like gold, while also being tied to industrial demand, which means it doesn’t always move in lockstep with equities or bonds. Historically, from 1971 through 2025, silver has delivered about 6.7% in annualized nominal returns (2.6% real), while gold has returned roughly 8.5% nominal (4.4% real), underscoring gold’s stronger long term performance as a store of value but still relevant compared with other asset classes. Silver often outperforms in periods of economic expansion or industrial growth, where its cyclical exposure can boost returns. 

Key Performance Metrics:

• While gold shows greater overall growth since 1971, silver demonstrates significantly higher volatility (1.5x)and more dramatic percentage gains during specific bull market periods.
• Market size impact: With a global market capitalization of roughly $15 trillion, gold far exceeds silver’s $0,15 trillion market cap. This disparity makes silver significantly more sensitive to capital inflows and outflows.
• Performance cycles: Rather than moving in lockstep, these metals follow distinct but related cycles, with leadership changing hands during different economic environments.
• Compared to mid-September 2024, so far in 2025 silver is up nearly 48% to around $42.75 per ounce, slightly ahead of gold’s 41% rise to about $3,695 momentum fueled by manufacturing demand, easier monetary policy, and a weaker dollar.

As Ray Dalio suggested in this article on September 13, 2025, he encouraged investors to reassess the traditional 60/40 portfolio mix of stocks and bonds. With government spending at least 40% higher than revenues, he explained that the primary way the debt will be serviced is through the Federal Reserve printing money to cover interest payments on Treasury bonds. Even with gold prices surpassing $3,600 an ounce, given the uncertainty in the bond market due to the U.S. government’s fiscal position and rising debt load, he recommends that most investors allocate 10% to 15% of a well diversified portfolio to gold. I personally align with this advice, and I believe that part of this allocation could also be invested in silver, which offers additional diversification benefits. While gold provides stability, silver’s smaller market size and higher price sensitivity to capital flows can enhance a portfolio’s risk-return profile in the current environment.

The big policy shift: silver hits the U.S. Critical Minerals Draft List

On August 25, 2025, the U.S. Department of the Interior unveiled the Draft 2025 Critical Minerals List, putting silver on it for the first time among other 54 items. They based it on a USGS framework checking supply risks, economic fallout, and recycling. Silver ranked high due to over 90% import reliance from Mexico and Peru. It is essential for solar (being used in the 90% of panels), defense electronics like guidance systems, and AI tech. New additions include copper, potash, silicon, rhenium, and lead, sorted by risk. The final list is expected to be released on early October and, if the silver is still there, could enable government stockpiling under the Energy Act and Defense Production Act via the Defense Logistics Agency. Now let’s dig more into it.

First, stockpiling efforts could increase, as the list informs the National Defense Stockpile managed by the DLA to hold reserves for national security needs. Funding could draw from allocations in the Fiscal Year 2025 National Defense Authorization Act (NDAA), which authorizes $895.2 billion overall for national defense, including provisions for critical minerals. Precedents include DLA investments in rare earth elements, such as over $400 million in equity and loans to MP Materials in 2025, and smaller awards like $6.4 million and $8.3 million to Canadian firms for cobalt and rare earth projects. Such purchases could absorb portions of global supply, potentially influencing prices, particularly given silver’s byproduct status in mining operations for copper or lead. So, the DPA could facilitate expedited interventions, authorizing the President to prioritize contracts, allocate resources, and require private sector involvement for critical materials. This might accelerate permitting for domestic mines on federal lands and offer financial support through the DPA Title III fund, which has received at least $4.4 billion from FY2020 through FY2025 for such purposes (Congress.gov). For silver, this could focus on byproduct recovery from U.S. copper mines in states like Arizona or Nevada, potentially increasing output without new major developments.

Second, under the Energy Act of 2020, financial incentives could promote domestic production, including grants and R&D through DOE programs, with nearly $1 billion announced in August 2025 for critical minerals projects, encompassing up to $500 million for processing and battery manufacturing, and $50 million for advanced technologies (Energy.gov). Tax credits under the Inflation Reduction Act (IRA) extensions provide up to 10% for critical mineral production costs (via Section 45X), encouraging recycling from sources like e-waste and advanced processing to lessen import dependence.  These measures could collectively support supply chain enhancements, with total funding across critical minerals potentially reaching billions in FY2025.

Lastly, tariffs and trade actions could also apply, as the list supports Section 232 investigations under the Trade Expansion Act, enabling duties of 25% on imports similar to those on steel and aluminum. Amid U.S.-China tensions, Section 301 tariffs on Chinese goods, including extensions through November 2025, could impose 10-25% rates on critical imports, bolstering domestic competitiveness. This aligns with the March 20  2025, Executive Order for the US president on Immediate Measures to Increase American Mineral Production, which aims to streamline regulations, increase funding, and reduce burdens on U.S. mining while addressing adversarial suppliers.

Supply challenges 

Shortly, let’s see the main silver supply challenges. Silver supply is under pressure, and I’ve been following how it’s creating deficits.The Silver Institute projects a sizeable shortfall again in the second half of 2025, the fifth straight year, around 206 million ounces as mining lags behind use. Mine production hit 830 million ounces in 2024, led by Mexico (23%), Peru (14%), and China (12%), but those spots face regs, strikes, and environmental concerns. Peru’s output might drop 5% from site disruptions like Antamina. Recycling chipped in 180 million ounces, but it’s spotty at 20-25% efficiency for industrial scrap, with costs rising. Also, U.S. – China tensions and Latin American logistics issues have bumped supply risks 15% since Q1 2025, per USGS.

Comparison of silver prices (September 2024 vs. September 2025)

Silver has gone from a ‘normal’ level of ~$30 in 2024 to over $42 in 2025, a jump that reflects not only inflation and geopolitics but also strategic recognition (like the draft 2025 Critical Minerals List). Should the current bullish momentum in silver persist through the end of 2025, driven by structural supply deficits, robust industrial demand from solar and electric vehicle sectors, and supportive U.S. monetary policy with anticipated rate cuts, prices could realistically climb to $45-$50 per ounce by December (per Sprott.com, 2025). This projection aligns with analyst forecasts, such as Sprott’s expectation of $77 longer-term by 2027, though tempered by HSBC’s more conservative $40+ estimate for the same period. However, silver’s inherent volatility 1.5 times that of gold with daily price swings often exceeding 2% poses risks to this outlook. Factors such as a strengthening U.S. dollar, potential recessionary pressures, or unexpected supply increases from reactivated mines could cap gains or trigger corrections, similar to the 2024 pullback when prices dipped 5% in Q3 amid surplus expectations. Conversely, confirmation of silver on the final 2025 U.S. Critical Minerals List, due in early October, could amplify upward pressure through government stockpiling and trade measures, potentially tightening global supply by 5-10% and sustaining the rally.  So, investors should monitor macroeconomic indicators and ETC inflows, which have already surged 25% YTD to 95 million ounces, as key signals for whether silver maintains its trajectory or faces headwinds.

Evaluation of inflows in silver ETCs: 2024 vs. 2025

ETCs like iShares Silver Trust – SLV which holds physical silver are an excellent proxy for inflows, as they measure speculative and hedging interest. Here’s a YTD comparison (up to mid-2025 vs. full 2024, since 2025 data is partial) (Silverinstitute.org, 2025):

• 2024 (full year): Net inflows into global silver ETCs (including SLV) were modest, totaling about 80-90 million ounces of physical silver equivalents, equivalent to ~$2.4-$2.7 billion in value (based on average prices ~$28-30). For SLV specifically, net YTD flows up to mid-2024 were around $500-600 million, with a peak in Q2 thanks to the post-US election rally. Overall, 2024 saw tepid sentiment, with net outflows in some quarters due to high rates and focus on tech stocks. 
• 2025 YTD (up to mid-September): Inflows are explosive. For global silver ETCs, net inflows in H1 2025 alone reached 95 million ounces (~$3.8 billion at average price ~$40), already surpassing the total for all of 2024. For SLV, net YTD flows are at about $644 million, with a 25% increase in ETC volumes compared to the previous years. This reflects an ‘investment surge’ driven by geopolitical risks (e.g., US-China tensions), inflation hedging, and rotation toward commodities. SLV has gained 41.62% YTD, with AUM growing 20-25% thanks to these flows. 

Why is it very interesting? The 2025 inflows indicate sustained bullish momentum compared to 2024, there is a +50-60% in terms of physical ounces accumulated, which absorb supply and support prices. If flows continue (e.g., post-Critical Minerals list), we could see an additional $1 billion in inflows by year-end, pushing SLV way beyond $40 NAV. 

Conclusions: strategic opportunities for silver amid dynamic market conditions

Sources:

Silver Institute, 2025: https://silverinstitute.org/silver-industrial-demand-reached-a-record-680-5-moz-in-2024/
Sprott Insights, 2025: https://sprott.com/insights/silver-investment-outlook-mid-year-2025
Carbon Credits, 2024: https://carboncredits.com/silver-lining-soaring-demand-outstrips-supply-pushing-prices-higher-solar-energy
Investopedia, 2025: https://www.investopedia.com/ray-dalio-says-gold-over-treasurys-for-stability-11808800
DOI.gov, 2025: https://www.doi.gov/pressreleases/department-interior-releases-draft-2025-list-critical-minerals
USGS.gov, 2025: https://www.usgs.gov/news/science-snippet/department-interior-releases-draft-2025-list-critical-minerals
Federal Register, 2025: https://www.federalregister.gov/documents/2025/08/26/2025-16311/2025-draft-list-of-critical-minerals
Congress.gov, 2025: https://www.congress.gov/bill/118th-congress/house-bill/3935
Energy.gov, 2025: https://www.energy.gov/articles/energy-department-announces-actions-secure-american-critical-minerals-and-materials-supply
Ainvest.com, 2025: https://www.ainvest.com/news/antamina-copper-lockdown-fatal-blow-peru-mining-sector-global-supply-chains-2504
DiscoveryAlert.com.au, 2025: https://discoveryalert.com.au/news/gold-vs-silver-investments-2025-performance-market-drivers
TradingEconomics.com, 2025: https://tradingeconomics.com/commodity/gold