Silver As An Investment: What To Know For 2026

Silver just shattered records, reaching $74 per ounce as of this writing. It’s up over 103% in the past year alone. Seeing these historic numbers, you are likely asking about silver as an investment.

Silver’s move is not driven by hype. It reflects supply and demand pressures. The market has had a deficit for five straight years, totaling about 820 million ounces, roughly a full year of global mine supply. At the same time, demand from solar, electric vehicles, and AI data centers keeps growing. Steady physical buying, especially from U.S. investors, is adding even more strain to an already tight market.

Here, you’ll learn all the details on investing in silver.

The case for owning silver

Silver is a different investment because it has two uses. Unlike gold, which is mainly held as a store of value, about 50 to 60% of silver demand comes from industrial use. That means silver responds to economic uncertainty and also growth in technology and manufacturing.

Silver’s role in industry:

• Electronics and electrical components: Silver’s high conductivity makes it essential for circuit boards, switches, and contacts.
• Solar panels: New technologies require silver paste on both sides of the panel.
• Medical and water purification uses: Silver’s purification properties support ongoing demand in healthcare and pharmaceuticals.
• AI data centers and advanced infrastructure: The rapid buildout of AI systems is driving a new wave of silver demand tied to energy and data processing needs.

Industrial demand hit record levels last year, with analysts pointing to AI data centers as a major new source of silver consumption. At the same time, silver still acts as a safe haven during periods of economic stress. That combination gives silver a different investment profile compared to gold.

Pros of silver investing

Silver has been used as money and a store of value for centuries. Investors turn to silver for three main reasons.

1. Hedge against inflation: When currencies lose purchasing power, silver tends to hold value because it is a physical asset with a limited supply.
2. Portfolio diversification: Silver often moves differently from stocks and bonds, which can help reduce overall portfolio risk during market stress.
3. Affordability: Silver trades at a much lower price than gold, which can make it easier to add to your portfolio without a large upfront investment.

U.S. investors buy far more silver than gold compared to investors in the rest of the world. In dollar terms, Americans spend almost as much on silver as they do on gold. This isn’t the case globally, where silver buying is only a small fraction of gold demand.

Cons of silver investing

Before you get started with silver investing, here are the risks and disadvantages to be aware of:

• Volatility: Silver prices can be volatile. If there’s a decrease in industrial demand, this can drop the market price. You should keep watch on various trends and consider using dollar cost averaging to add to your silver holdings at different market rates.
• Economic factors: When the economy is doing well, silver, gold, and other precious metals generally become less attractive. This is because investors move into other assets that have a higher yield.
• No income: Silver doesn’t produce income. You won’t see cash flow or yield. Instead, your returns come from price appreciation.
• Storage and insurance: You’ll need to consider storage options and costs as part of your overall financial analysis. And, if you store your bullion at home or in a bank vault, you’ll also need to buy insurance coverage to protect against theft or damage.

Below is a summary table of silver investing pros and cons:

Benefits	Risks
Inflation hedge	Price volatility
Portfolio diversification	Sensitive to economic cycles
More affordable than gold	No income or yield
Physical, tangible asset	Storage and insurance costs

Types of silver investments

There’s a few different ways you can add silver to your portfolio.

Physical silver: coins and bars

You can own the actual metals in the form of physical bars or coins.

Silver bullion coins

Government-minted coins can be a good choice. People recognize coins like the American Silver Eagle and the Canadian Maple Leaf everywhere in the world. These coins also carry government guarantees of weight and purity (.999 fine silver).

Silver coins can be very liquid since dealers and collectors worldwide instantly recognize their authenticity. American Silver Eagles can command higher premiums above spot price, depending on the dealer, purchase quantity, and current market conditions.

Silver bullion bars

You can also buy silver bars in various weights and sizes from refiners like PAMP Suisse, Valcambi, and Johnson Matthey.

Below is a comparison of physical silver options:

Silver form	Best for	Liquidity
Government coins	Recognition, resale ease, IRA eligibility	Highest
Silver bars (1-100 oz)	Bulk purchases, cost efficiency	Moderate
Generic rounds	Budget-conscious stackers	Moderate

With silver coins or bars, you’ll also need to consider storage. You might buy a home safe, use a bank safety deposit box, or use a third-party depository that provides specialized vaulting with insurance.

Paper silver: ETFs and mining stocks

You can also buy silver paper assets like exchange-traded funds (ETFs). Examples include SLV (iShares Silver Trust) and SIVR (Aberdeen Standard Physical Silver Shares ETF), which track the spot price of silver. These investments trade on major exchanges just like stocks, so they are very liquid.

The paper silver market also includes silver stocks in mining companies, mutual funds that hold silver assets, and silver futures contracts.

Here is a comparison of the different ways of investing in silver:

Investment type	Advantages	Disadvantages	Best use case
Silver ETFs	No storage, high liquidity, low transaction costs	No physical ownership, annual fees, counterparty risk	Short-term trading
Physical silver	Tangible asset, no counterparty risk, IRA-eligible	Storage costs, higher premiums	Long-term holding, wealth preservation
Mining stocks	Leverage to silver prices, dividend potential	Company-specific risks, operational challenges	Growth-oriented investors
Silver mutual funds	Professional management, diversified exposure	Management fees, indirect price tracking	Hands-off exposure
Silver futures contracts	High leverage, price precision	High risk, margin calls, expiration	Advanced traders, hedging

When comparing these options, start with your time horizon and goals. Physical silver fits long-term ownership and gives you a tangible asset if the financial system comes under stress.

Some of the paper options can work for the short term since they are easy to buy and sell.

Market forces driving the price of silver

As you look at investment options, it’s good to review the market details and what impacts the price of silver.

Supply deficits

When you evaluate silver’s potential, consider the supply deficit happening right now. 2025 was the fifth consecutive year of a shortfall estimated to be between 95 and 120 million ounces. This isn’t a temporary imbalance that will quickly self-correct. The cumulative damage keeps growing:

“The cumulative five-year deficit totals approximately 820 million ounces, equivalent to roughly one year of typical mine supply.”

The supply-side constraints creating this deficit are due to the economics and geology of silver production:

• Mine production flat at 813-835 Moz: Global output has declined 7% from 2016 peaks and shows little sign of meaningful growth.
• 70-80% of silver is mined as a by-product: The majority of silver comes from copper, gold, lead, and zinc operations, not dedicated silver mines.
• No major new mining projects coming online: Capital intensity, permitting delays, and extended development timelines have curtailed new supply.
• Declining ore grades and inelastic supply response: As the easiest, richest deposits are exhausted, miners must process more rock for less metal.

The thing about silver is that it’s a by-product of other metal production. For other metals like gold or copper, companies can add new dedicated mines, but silver production can’t respond quickly to higher prices.

This inelastic supply means that even at $75+ per ounce, you shouldn’t expect a flood of new silver to suddenly balance the market.

Industrial and investment demand growth

Looking ahead to 2026, industrial demand for silver remains strong. Even as some manufacturers try to reduce silver use to offset higher prices, total industrial demand keeps setting records. The Silver Institute estimates about 665 million ounces of industrial demand, or roughly 59% of total consumption. A few key sectors are driving that growth:

1. Photovoltaic/solar: Silver use in solar panels is growing, not shrinking. With solar capacity expanding under policies like the U.S. Inflation Reduction Act and the EU Green Deal, this sector alone could consume much more silver through 2026 and beyond.
2. Electric vehicles: Electric vehicles use more silver than traditional gas-powered cars. EVs rely on complex electrical systems for batteries, safety features, driver assistance, and onboard technology. As vehicles become more advanced and connected, the amount of silver used in each one continues to rise.
3. AI and data centers: The energy and data infrastructure behind artificial intelligence is a major new source of silver demand. AI data centers require enormous electrical systems, power distribution, and cooling equipment, all of which depend on silver’s conductivity. As AI spreads across industries, this source of demand is only starting to show up in today’s numbers.
4. Physical investment: American investors have been heavy buyers of silver, accumulating about 1.5 billion ounces between 2010 and 2024. Much of that metal has stayed put, with limited selling even after prices rose. Recent ETF inflows have added more buying pressure, tightening the market and at times stressing liquidity on commodity exchanges.

Silver versus gold

Gold and silver are both precious metals, but they’re different in how they behave:

Silver and gold prices

Silver is much more volatile than gold. The market is smaller and less liquid, so it doesn’t take much buying or selling to move the price. Gold is steadier because the market is deeper and dominated by central banks and large institutions.

Gold-to-silver rule

Many investors watch the gold-to-silver ratio closely. It shows how many ounces of silver it takes to buy one ounce of gold. When the ratio is high, silver looks cheap compared to gold. When it is low, silver looks expensive. Over time, that ratio can change, which is why traders and long-term buyers watch what’s happening with it.

This happened in 2011 during the U.S. debt ceiling crisis. Gold rose as confidence in government finances weakened. Silver followed, then went much higher than gold before eventually pulling back. That cycle showed exactly how silver behaves. It magnifies whatever is happening in gold.

Poor man’s gold

Silver also gets called “poor man’s gold.” It is not a flattering phrase, but silver gives people a cheaper way to own precious metals. You can buy a lot more silver than gold with the same amount of money. Affordability is one reason silver demand can explode during metals bull markets, especially among retail investors.

Silver investing considerations

If you want to gain exposure to silver in your portfolio, here’s a few ideas on how to approach it:

Building a silver investment strategy

Owning silver works best when you know why you’re buying it and how much you want to own. Decide where it fits in your portfolio and stick to that. That keeps you from guessing or reacting to every price move.

Here’s a four-step approach:

1. Decide how much to allocate: Most financial advisors recommend dedicating 5-15% of your total portfolio to precious metals. The specific percentage depends on your risk tolerance and investment objectives. Within that allocation, you can go with gold, silver, or other metals.
2. Pick an investment form: Physical precious metals work best for long-term wealth preservation and provide tangible security. ETFs can be convenient for short-term investments, but have counterparty risks.
3. Set objectives: Are you primarily seeking wealth preservation against currency debasement? An inflation hedge to protect purchasing power? Or speculative growth from? Your objectives should dictate your choice and planned holding period.
4. Choose an entry strategy: You can invest a lump sum or use dollar-cost averaging by making regular purchases over time. Buying a little at a time helps avoid putting all your money in at a bad moment and takes the pressure off short-term price changes.

Stick with reputable dealers, so you know what you’re buying and what you’ll get when it’s time to sell. Good dealers verify their products and are upfront about buyback policies. As for price targets, forecasts for 2025 and 2026 are all over the map, which is another reason to focus on your long-term plan instead of trying to find the perfect entry point.

Understanding costs and tax implications

Before buying silver, understand the costs involved. The spot price is only part of the picture. Storage, insurance, and transaction costs all affect what you earn over time.

Key costs to consider include:

• Premiums: Expect to pay a cost above spot, depending on whether you choose bars, rounds, or premium government coins.
• Storage and insurance: Annual costs can range from $100 to $500 for professional vaulting or specialized home insurance riders.
• ETF fees: Silver Exchange Traded Funds charge an annual management fee of approximately 0.5%.

When you sell physical silver, also be aware of capital gains taxes. The IRS treats silver as a collectible, which means gains can be taxed up to 28%. That is higher than the long-term capital gains rate on stocks and bonds and can take a bigger amount of your returns.

Silver prices and timing

Trying to perfectly time the silver market is a difficult, if not impossible, task. Instead of trying to pinpoint the top or bottom of the market, a better approach is to watch key indicators like:

• Spot price relative to production costs ($20-25/oz): When silver prices fall close to what it costs miners to produce it, there tends to be a floor under the market. At that point, higher-cost production starts to shut down, which limits how much further prices can fall.
• Gold-to-silver ratio (historically averages 60:1): Right now, the gold-to-silver ratio is still high, which means silver could be cheap relative to gold. If that gap narrows over time, silver has room to catch up.
• Industrial demand trends, particularly solar and AI sectors: Acceleration or deceleration in these high-growth use cases can have an impact on medium-term demand.
• Dollar strength and interest rate environment: A weakening dollar and lower real interest rates create strong conditions for precious metals.

Keep an eye on silver prices so you know what’s going on, but don’t try to pick the exact top or bottom. Even professionals get that wrong. Focus on buying when prices make sense to you and stick with your position through the ups and downs that come with metals.

Why is silver a great investment?

Silver prices continue to rise because of economic conditions, along with limited supply and increased demand. To learn more about investing in silver and how to get started, connect with the Swiss America team today!

Silver as an investment: FAQs

Is owning silver a good investment?

Silver can be a good investment. Prices can be volatile, so you’ll want to consider it as a long-term strategy. Over time, silver can protect your wealth from inflation or economic conditions that threaten the value of the US dollar. Comparing silver vs inflation shows use:

• 2020-2025: Silver prices rose over 70% and outpaced inflation.
• 2015-2020: Silver prices were flat to slightly negative with lower inflation rates.
• 2010-2015: Crisis demand drove up the price of silver to a high point with 74%+ growth in 2011, but dropped by 2015.

What is the 80 50 rule for silver?

This is a way that investors describe how silver tends to react when gold enters a bull market. Gold usually leads, and silver follows with larger price changes I.

• Silver often gains about 80% of gold’s move at first: When gold starts rising, silver usually lags but still follows. In the early stages, silver may capture roughly 80% of gold’s percentage move.
• Later, silver can outperform gold by 50% or more: Once momentum builds, silver often accelerates faster than gold. At that point, silver may rise 50% more than gold, or even double gold’s percentage gains.

Is it good to invest in silver now?

At th I e time of this writing, silver is up 140% from last year, which can make anyone question if it’s the right time to buy. It’s impossible to time the market, but you can check out the following resources to see what’s happening that might impact future results:

• Silver Institute: In-depth research reports on silver supply, demand, and market trends.
• U.S. Energy Information Administration: Data on renewables and energy trends that impact industrial silver demand.

Also, consider dollar cost averaging as a way to buy silver over time and reduce the pressure of trying to time the market.

The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.