Silver has enjoyed a remarkable run this year, climbing roughly 33% and drawing the attention of investors worldwide. Beyond its role as a precious metal, silver is essential to many modern technologies, fueling rising industrial demand while also serving as a time-tested hedge against currency devaluation.
Recently, analyst Alan Hibbard appeared on Schwab TV to examine the dynamics behind silver’s rally. Demand is coming from multiple sources—retail buyers, institutional investors, and central banks—leading Hibbard to forecast that silver could outperform gold by roughly 2-to-1 in the near term.
Below we review recent market developments and the factors supporting silver’s advance.
Central Banks Continue Purchasing Gold
Data from the World Gold Council show that global central banks have accumulated about 2,200 tons of gold since the third quarter of 2022. China’s central bank, in particular, has expanded its holdings for 18 consecutive months, increasing reserves by roughly 16%—about 10 million troy ounces.
Copper Hits New Highs as Future Demand Drivers Gain Traction
Copper prices have surged this year, rising about 35% and reaching record levels on the London Metal Exchange. The rally, fueled in part by short-covering and speculative activity, reflects expectations for sustained demand. Copper remains a critical component across power infrastructure, construction, electric vehicles, and data centers—sectors that will likely support elevated consumption going forward.
Rising Unemployment in Many States Raises Recession Concerns
Piper Sandler’s chief global economist, Nancy Lazar, warned that a recession could be on the horizon after 19 U.S. states reported at least a 0.5 percentage point increase in average unemployment—a historical early-warning signal for national downturns.
This Week in History: The Securities Act of 1933
On May 27, 1933, the U.S. enacted the Securities Act of 1933, one of the foundational reforms of the New Deal era. Designed to restore public confidence in financial markets after the 1929 crash, the Act required issuers to disclose truthful, complete information about securities offerings. By establishing rigorous disclosure standards, the law helped create greater transparency and accountability in capital markets, enabling investors to make more informed decisions.
The fire assay method is a traditional and highly accurate technique used to determine the purity and content of gold and silver, developed in 1350 B.C. Which ancient culture developed the fire assay method?
A. Egyptians
B. Babylonians
C. Phoenicians
D. Sumerians
Scroll to the bottom of this email for the answer…
What Is Driving the Silver Surge?
Silver’s strong performance this year—up around 33% year-to-date—reflects a combination of long-term structural trends and near-term market dynamics.
Silver has a deep historical role as money and store of value that stretches back millennia, but today several practical factors make it an attractive investment and industrial input:
- Industrial demand: Silver is among the most widely used industrial metals because of its exceptional electrical and thermal conductivity and high reflectivity. It has thousands of applications across electronics, solar panels, medical devices, and more. As green technologies proliferate—electric vehicles, solar installations, and data centers—industrial demand for silver is expected to rise. For perspective, an electric vehicle can use significant quantities of silver in its electrical systems, while solar modules incorporate silver paste in cells.
- Inflation hedge and portfolio diversification: As a tangible asset, silver is immune to digital risks and currency debasement, which makes it a popular store of value in inflationary environments. Historically, periods of high inflation have driven sharp gains in silver prices. Silver’s low correlation with many financial assets also supports its role in diversified portfolios.
- Accessibility: Silver’s lower per-ounce price compared with gold makes it an affordable entry point for new precious-metals investors. This accessibility can widen the buyer base and boost retail demand when market interest rises.
These fundamentals, combined with increased visibility from mainstream retail and institutional channels, help explain why demand appears broad-based and persistent.
Alan Hibbard on the Schwab Network
On Schwab TV, Alan Hibbard discussed the bullish forces behind both gold and silver. He pointed to steadily rising central bank purchases since 2016 and noted unusually strong retail interest, including gold sales through large retail channels. Hibbard emphasized that demand is coming from every market segment—from retail buyers to central banks—and that this breadth supports further upside for precious metals.
In the interview, Hibbard argued that the broader economy may be less robust than official narratives suggest and that precious metals are well placed to benefit. He expects silver to potentially outperform gold in the short term and said a move toward substantially higher silver prices, including the possibility of reaching $50 per ounce, is not out of the question.
That concludes this week’s issue of GoldSilver Nuggets. We’ll return next week with more market updates and analysis.
Best,
Brandon S.
GoldSilver
The fire assay method is a traditional technique used to determine the purity and content of gold and silver, dating back to 1350 B.C. Which ancient culture developed the fire assay method?
A. Egyptians
B. Babylonians
C. Phoenicians
D. Sumerians
Answer – B. Babylonians
Archaeological and historical records indicate the Babylonians were using early fire assay techniques to evaluate the purity of gold around 1350 BCE. The traditional fire assay involves mixing a small metal sample with fluxes in a crucible and heating it to high temperatures so impurities separate and the pure metal can be isolated and measured. This long-standing method formed an important foundation for metallurgical analysis in ancient and later societies.