Should the silver medal replace the gold?

Due to silver's special properties that make it ideal for industrial uses like electrical components, demand for the metal—which is frequently overshadowed by gold—is currently exceeding supply

Investment writer Jake Coulson of HANetf.

For some, silver is a prime example of second place. It is frequently compared to its more valuable older sibling, gold, even though it is a precious metal that is used in jewelry, silverware, and stored as bars and coins.

However, the comparison is a little unfair because, whereas jewelry, investments, and central bank purchases account for about 94% of the demand for gold, the corresponding percentage for silver is only 39%1.

The majority of silver demand (61%) is derived from industrial uses rather than jewelry or its use as a store of value. This poses two questions for investors: first, why is silver important, and second, how might rising demand affect its producers?

GoldSilver, 2026, The World Gold Council.

Metal used in industry.

Silver has a unique set of chemical and physical characteristics. It has medicinal uses due to its inherent antimicrobial properties and serves as a chemical catalyst in the production of materials like plastics and synthetic textiles.

More significantly, though, silver outperforms copper4 as the most electrically conductive metal on Earth. Additionally, it resists corrosion and is thermally conductive, which makes it useful for electrical contacts, circuitry, and other components.

The demand is being driven by electrification.

Silver is found in almost everything that uses electricity, including laptops, smartphones, cars, and household appliances.

As governments and corporations work to decarbonize by substituting electrified technologies for fossil fuels, this role is becoming more crucial. Compared to conventional cars, electric vehicles typically require more electrical components, and conductive materials are also necessary for renewable energy systems and charging infrastructure. Solar energy is a particularly significant source of demand because solar cells use silver paste.

The proliferation of power-hungry data centers brought about by the development of artificial intelligence is further taxing the electrical system. Significant investments in transmission and generation will be necessary to meet their electricity needs.

Silver's unique qualities make substitution challenging, but manufacturers are working to use it more effectively or replace it whenever possible, especially when prices rise.

Supply might find it difficult to react.

There is no guaranty that supply will rise at the same rate as demand. While deposits must be profitable at current metal prices, new mines may take many years to develop.

Another issue with silver is that about 70% of its production worldwide comes from the mining of metals like copper, lead, and zinc. Thus, rather than silver itself, production decisions are frequently influenced by the demand for these metals.

As a result, even a significant rise in the price of silver might not cause a quick supply reaction. Recycling can be helpful, but it can be challenging or costly to recover tiny amounts scattered throughout electronic products.

Given the recent deficits, this rigidity has grown in importance. The average annual difference between supply and demand for silver over the last five years has been about 100 million ounces. Temporary shortages can be filled by above-ground inventories, but ongoing deficits may lessen that buffer.

How might silver miners be affected by this?

Silver prices may be supported by competition for available metal if demand keeps exceeding supply. Increased prices can boost miners' earnings and, in cases where expenses are kept under control, result in a correspondingly greater rise in profit margins.

Leveraged exposure to silver prices can thus be obtained through silver-mining shares, but the relationship is reciprocal: declining prices or increasing expenses may put more strain on profitability.

Investing in individual miners is one strategy for investors interested in the theme. Investing in a silver-mining Exchange Traded Fund (ETF) is another option. This can reduce reliance on any one miner by offering diversified, risk-mitigated exposure across multiple companies.

Silver should not be compared to its less valuable counterpart, gold, in an increasingly electrified world. It is a strategic material with a significant role of its own11.

Investors who are interested in the theme can talk to a financial advisor about the various strategies or look into options through their investment platform.

Go to hanetf . com for more details.

This content is not a marketing document. It should only be read for educational purposes; it is not a call to invest. Forecasts and past performance are unreliable predictors of future outcomes.

1 World Gold Council; GoldSilver (2026).

2 GoldSilver (2026).

3 The Silver Institute (2026).

4 Silver Institute, 2026.

5 The Silver Institute (2025).

IEA 6 (2026).

7 The Economic Times (2025).

8 Mining . com (2026).

9 Mining . com (2025).

10 Silver Institute, 2025.

BullionVault 11 (2026).