Silver (Silver) – Get to know the indispensable industrial asset

Silver Metals Are Attracting Investors’ Attention

Recently, silver has moved up from historically low levels. As we look at the global market, many international investors are showing increased interest. Today, we will explore why silver is a significant investment opportunity and how Thai investors can access this asset.

History and Role of Silver in the Global Economy

Before the era of paper currencies or digital financial systems, silver served as a store of value for over 4,000 years. Historical records show that:

• Archaeological evidence indicates that ancient populations used silver in the form of rings and bars with standard weights as far back as 3000 BC.
• In the 16th century, Spain produced silver coins, which became the first global currency accepted across multiple continents.
• Silver was legally recognized as a medium of debt payment in the United States until 1857.
• Although official financial roles ended when the silver standard was abolished in 1935, silver continued to be produced in coin and bar form for investment purposes until today.

Why Silver Has Become the Key to Future Technology

The unique physical properties of silver make it an indispensable component in future technology industries, even more so than gold:

Electrical and thermal conductivity – making silver a crucial element in all electronic devices.

Reflectivity – enhancing the efficiency of converting sunlight into electricity in solar panels.

Antimicrobial properties – widely used in medical applications, from burn dressings to surgical tools and water filtration systems.

Flexibility and ease of processing – suitable for microelectronics requiring small, complex components.

These factors are driving current demand for silver, whether in clean energy transitions, electric vehicle development, 5G networks, or general technological infrastructure—all reliant on silver.

Factors Influencing Silver Prices: Macro and Micro

Macro Factors

Monetary policy and interest rates – the relationship between interest rates and asset prices is clear. Lower interest rates support higher silver prices.

US dollar value – generally, when the dollar weakens, investors holding other currencies can buy silver at lower prices, boosting demand.

Inflation and global political uncertainty – silver acts as a safe haven asset against currency devaluation and economic crises.

Micro Factors: Supply and Demand Imbalance

The World Silver Survey 2025 reports that the silver market is facing a significant “structural deficit”—meaning global demand exceeds combined production and recycling. This situation has persisted for four consecutive years.

Surging demand – Industry demand hit a new high of 680.5 million ounces in 2024, accounting for nearly 59% of total demand, especially from renewable energy, electric vehicles, and high-speed technology sectors.

Supply falling short – Production cannot meet demand due to disruptions, with mined silver being a byproduct of other mineral extractions and reserves decreasing.

Comparing Gold and Silver: Similarities and Differences

Gold/Silver Ratio – A valuation indicator

This ratio indicates how many ounces of silver are needed to equal one ounce of gold.

• During market shocks, such as the COVID-19 crisis in March 2020, investors flocked to highly liquid gold, causing the ratio to spike to 124:1 (record high).
• Conversely, as confidence returned and investors accepted higher risks for better returns, they turned to silver. In 2011, the ratio dropped to 31:1.
• The current ratio remains high, indicating that silver prices do not fully reflect its industrial value.

Market Size, Volatility, and Role

Market size – The gold market is valued at approximately $30 trillion, while silver is around $2.7 trillion. A smaller market size means that capital inflows can more significantly impact prices.

Volatility – Silver is 2-3 times more volatile than gold, meaning it can fall faster in a bear market but also rise rapidly during bullish trends.

Role – Central banks worldwide hold gold as reserves, but silver is a hybrid asset—part precious metal, part industrial commodity. Central banks do not hold silver as reserves, so its price is more linked to economic cycles and industrial demand.

Investment Suitability

For investors seeking maximum stability, gold remains the primary choice. However, for those willing to accept higher risks for greater returns, current fundamentals make silver an attractive option—especially since its price remains historically below gold when compared directly.

How to Invest in Silver Metals

Physical Silver Storage

The traditional method involves purchasing silver bars (Silver Bars) or silver coins (Silver Coins).

Advantages: You own tangible assets, can physically hold them, with no counterparty risk, and maintain privacy.

Disadvantages: Requires significant initial investment, additional costs for secure storage and insurance, lower liquidity, and risks related to verifying purity.

Investment via Funds and Mining Stocks

Indirect investment by purchasing units of mutual funds or shares of mining companies.

Mutual Funds: Investors can invest in funds focused on global silver mining companies.

Mining Stocks: For those with access to international stock markets, buying shares of major silver producers.

Advantages: High liquidity, easy trading through stock exchanges, no storage concerns.

Disadvantages: Company-specific risks such as management issues, costs, or political risks; stock prices may not always track global silver prices.

Futures Contracts Trading

Suitable for experienced investors seeking derivatives exposure.

Advantages: Low initial capital, profit potential in both rising and falling markets.

Disadvantages: Very high risk, complex, suitable only for seasoned traders.

CFD Trading

Flexible method for short- to medium-term speculation.

Contracts for Difference ((CFD)) allow investors to profit from price differences of silver (XAGUSD) without owning the physical asset.

Advantages: Low initial capital due to high leverage, flexible trading at any time, profit in both directions, no storage costs.

Disadvantages: Leverage risk, counterparty risk, requires choosing a trustworthy broker.

( Investment Method Comparison

Pros and Cons of Investing in Silver

) Advantages and Opportunities

High return potential – Due to greater volatility and valuation relative to gold, silver can generate significantly higher returns during bullish markets.

Growing industrial demand – Transition to clean energy, digital technologies, and new innovations will sustain long-term demand.

Affordable price per ounce – Lower per-ounce price compared to gold makes silver more accessible to retail investors.

Inflation hedge asset – Silver has a history of preserving value and protecting against fiat currency devaluation.

Risks and Disadvantages

High price volatility – While volatility can lead to substantial gains, it also increases the risk of significant losses.

Sensitivity to economic cycles – Over half of demand comes from industry, making silver vulnerable to economic slowdown.

Costs and risks of holding physical assets – Storage, insurance, and theft risks.

No interest income – Returns are solely from price differences.

Summary

Silver is no longer just a secondary asset to gold but has become a core component of the modern technological world. Growing industrial demand combined with supply shortages makes silver an attractive medium- to long-term investment option for those seeking opportunities.

The suitability of investing in silver depends on individual financial goals, risk tolerance, and investment horizon. For modern investors looking to diversify their portfolios, understanding fundamental factors and various investment methods is a crucial first step in developing a balanced investment strategy.