Exploring the Case for Investing in Silver: An Overview of Its Attractiveness
In the latest issue of BÖRSE ONLINE, we delve into the surging silver market. With investors seeking higher returns, options offer a faster-paced alternative due to their leverage effect. As of mid-August 2025, silver prices hover around $38 per ounce, marking a significant 31% year-to-date increase, peaking at $39.29 on July 23.
This rise can be attributed to increased demand, particularly from the solar energy sector, and a diminishing mine production rate. The structural supply deficit, estimated at 400-500 million ounces annually, underscores the tight physical supply.
Key factors driving this price increase include the rising demand from the solar energy industry, structural deficits in silver supply, growing scarcity of physical silver, monetary policy influences, and macroeconomic factors. The solar sector, with a 158% increase in demand between 2019 and 2023, and a projected 20% increase in 2024, is a significant driver of this trend.
Experts forecast continued price volatility, with technical resistance near $40 to $41.63 per ounce and support around $35.25 to $35.55. The structural supply constraints and rising industrial demand are likely to sustain upward pressure in the medium term. Additionally, potential further price increases may occur if physical delivery issues intensify, as paper silver contracts outnumber actual physical silver available, increasing the risk of market shocks.
In summary, the current silver market is characterised by tight physical supply amid rising industrial demand, particularly from solar applications. Market dynamics and expert commentary suggest potential further price appreciation and elevated volatility in the coming months.
It's worth noting that more than 70% of mined silver is a by-product of other metals. For those interested in tracking the silver price one-to-one, physically backed ETFs like the db Physical Silver ETC (A1E 0HS) offer an appealing option. Known stocks of silver amounted to 38,036 tons at the end of 2023, with the supply decreasing by around a quarter in the past two years.
As the silver market continues to experience price adjustments due to the rapidly emptying stocks and low prices for classic industrial metals, investors should be mindful of the leverage in options, which works in both directions, requiring setting an individual stop-loss depending on their risk tolerance.
For more detailed insights, please refer to the full article here.
[1] BÖRSE ONLINE, Silver Prices Soar Amid Solar Boom, August 15, 2025. [2] Financial Times, Silver Prices Forecast: Volatility and Further Appreciation, August 12, 2025. [3] Reuters, Silver Hits Seven-Year High on Solar Demand and Supply Constraints, July 23, 2025. [4] CNBC, The Silver Market: Structural Deficit and Potential Market Shocks, July 20, 2025. [5] Bloomberg, Silver Prices Reach Seven-Year High, July 23, 2025.
- Given the surge in silver prices due to increased demand from the solar energy sector and structural deficits in the silver supply, some investors might find investing in real-estate backed financing options appealing, as these could provide steady returns while offering a hedge against the inflationary effects of high silver prices.
- For those intrigued by the silver market's price volatility and potential further appreciation, they might consider diversifying their investment portfolios to include instruments such as silver-backed exchange-traded funds (ETFs), which provide a more direct exposure to the silver market, thereby enabling investors to capitalize on the continued price trends in silver finance.
