Silver
Silver is two markets wearing one ticker: a monetary metal that trades like gold, and an industrial input that trades like copper. Which one is driving changes without warning.
At a glance
- Traded as
- Refined bullion, quoted per troy ounce
- Benchmark
- The LBMA Silver Price, set daily in London
- World mine production
- Roughly 25,000 tonnes, about 820 million ounces, in 2024
- Largest producer
- Mexico, close to a quarter of mine supply
What is actually being traded
Silver trades as refined bullion in troy ounces, like gold, and the two often move together. The similarity ends at the demand side: more than half of silver is consumed by industry, physically used up in solar panels, electrical contacts, brazing alloys and electronics, while almost all gold is simply stored.
That gives silver a genuine flow market on top of its stock market, and it is why silver is more volatile than gold in both directions. The monetary bid and the industrial bid can arrive at the same time or cancel each other out.
The ratio traders quote - ounces of silver per ounce of gold - is a sentiment gauge rather than a physical relationship. It has ranged from the low thirties to over a hundred in modern times, so treating any particular level as fair value is a bet, not an observation.
Over half of silver demand is industrial and physically consumed. That is the single difference from gold that explains most of its behaviour.
What it is used for
Silver is the best electrical and thermal conductor of any element, and it does not oxidise into an insulating layer. That combination puts it in solar cells, electrical contacts, brazing alloys, and the printed conductive pastes inside modern electronics.
Photovoltaics turned an ordinary industrial use into a market-moving one: a solar cell contains a small amount of silver, and the world now builds an enormous number of solar cells. Manufacturers work continuously to reduce the loading per cell, which is a real countervailing force - the demand story depends on installations growing faster than thrifting reduces intensity.
- Industrial (electronics, solar, brazing)
- 56%
- Jewellery
- 17%
- Physical investment (bars and coins)
- 16%
- Silverware
- 6%
- Photography and other
- 5%
Source: Silver Institute World Silver Survey
Where it comes from
Mexico and Peru have led silver production for centuries, and the deposits there are still among the richest. But the more important fact about silver supply is structural: most of it is not mined on purpose.
Roughly seventy percent of silver comes out of the ground as a by-product of copper, lead, zinc and gold mining. Those operations are planned around the price of the main metal, which means silver output barely responds to the silver price. A shortage cannot be fixed by drilling for more silver - it has to be fixed by demand or by recycling.
| Name | Share |
|---|---|
| Mexico | 24% |
| China | 13% |
| Peru | 12% |
| Chile | 5% |
| Poland | 5% |
| Rest of world | 41% |
Source: USGS Mineral Commodity Summaries 2025
Behind the subscription
The rest of this entry is the part that changes a decision: what moves the price, which contract sets it, who ships it and where that can be cut off.
What moves the price
Why silver amplifies every gold move, what solar installations do to the balance, and the supply rigidity that makes shortages last.
Where it is traded
The London and New York markets, contract sizes and settlement - and why silver's smaller float makes delivery mechanics matter more than in gold.
Who ships it, and where it concentrates
Where silver goes after the mine, why India's import swings move the price, and the vault stocks that decide whether a deficit becomes a squeeze.
How this shows up in prediction markets
How to price a silver threshold given its correlation with gold, and the two checks that separate a real squeeze story from a recurring one.
Included with a subscription
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Frequently asked questions
- Why is silver more volatile than gold?
- Because it has two demand engines and a much smaller market. The monetary bid follows gold, the industrial bid follows manufacturing, and the total value of the market is small enough that flows which barely register in gold move silver noticeably.
- What is the gold-silver ratio good for?
- As a sentiment gauge and a way to state a silver view relative to gold. It is not a physical constant - it has ranged from the low thirties to over a hundred - so a level alone is not evidence of mispricing.
- Does solar demand really move the silver price?
- It has become one of the largest single sources of industrial demand, and it is the reason recent years have run in deficit. The counterweight is thrifting: manufacturers cut the silver content per cell every year, so the story depends on installations outgrowing that reduction.
- Why does silver supply not respond when the price rises?
- Because roughly seventy percent of it is a by-product of copper, lead, zinc and gold mines, which are operated around the price of the main metal. Higher silver prices do not cause more silver to be mined in any meaningful timeframe.
Primary sources
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