Why silver is having a golden moment

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Subscribe to enjoy similar stories. All that glitters isn’t just gold—it’s also silver. The commodity’s price is up about 34% year to date, outpacing gold, which keeps hitting record highs.

Year to date, about $856 million has flowed into the iShares Silver Trust, an exchange-traded fund that owns physical silver bullion, according to FactSet. Wheaton Precious Metals, a company that owns the rights to precious metals from mines, including gold and silver, is up about 30% year to date. Demand for silver has been strong, both as a store of value and as an industrial commodity.

The Silver Institute, an industry association, estimates that demand for silver has been outrunning supply for the past three years. It projects another deficit this year. Citi Research, which assumes that solar-sector demand has been even higher, calculates that the market has been in deficit for the past five years.

For one, mine production has been weak. More than 70% of mined silver is a byproduct of other metals, such as lead, zinc, copper and gold. Prices for zinc have been weak, prompting mine closures.

Last year, a major mine in Mexico—the world’s top supplier—didn’t operate for four months because of a strike. While recycling can make up for some of that shortfall, it typically accounts for less than 20% of total supply. At the same time, demand from industrial uses has been growing, in large part thanks to solar-panel manufacturing, where silver is integral.

Unlike gold, a major chunk of silver supply is used for industrial purposes. Solar-sector demand for silver jumped 158% from 2019 to 2023, according to the Silver Institute. The group expects that demand to grow an additional 20% this year.