🥈 Silver
Silver is the hybrid metal — part precious, part industrial — and that duality makes it one of the most volatile and misunderstood trades in the commodity space. Understanding silver’s split personality gives traders an edge in timing entries and reading what the market is actually pricing.
What makes silver special?
If you’re coming from equities, you might lump silver in with gold as “precious metals.” That’s a mistake. Silver occupies a unique middle ground that no other metal can claim.
The Jekyll and Hyde Metal
Silver is sometimes called “gold on steroids” because it tends to move with gold but with far more volatility. But that description misses the key insight: silver is genuinely torn between two identities.
| Metal | Primary Driver | What It Tells You |
|---|---|---|
| Gold | Fear, real rates, dollar weakness | Risk sentiment, inflation expectations |
| Copper | Pure industrial demand | Actual economic activity |
| Silver | Both simultaneously | Conflicting signals, amplified moves |
Roughly 50% of silver demand is industrial (electronics, solar panels, EVs, medical devices) while the other 50% is investment/monetary (bars, coins, jewelry, silverware). This creates a metal that can rally on fear or greed — and sometimes both at once.
Industrial Demand is Growing
Unlike gold (purely monetary) or copper (purely industrial), silver’s industrial applications are expanding rapidly:
- Solar panels: Each panel uses ~20 grams of silver for its photovoltaic cells
- EVs: Electric vehicles use 25-50 grams of silver (2x more than ICE vehicles)
- 5G/Electronics: Silver has the highest electrical conductivity of any metal
- Medical: Antibacterial properties drive usage in wound care and medical devices
The electrification megatrend is bullish for silver’s industrial side — the same story driving copper applies here.
Supply is Concentrated and Constrained
Silver supply has its own quirks:
- ~70% comes as a byproduct of mining other metals (lead, zinc, copper, gold)
- Mexico, China, and Peru account for ~48% of global mine production
- Primary silver mines are relatively rare — most silver comes incidentally
- Above-ground stocks are much smaller than gold (silver gets consumed, gold gets hoarded)
This byproduct nature creates inelastic supply: silver production can’t ramp quickly just because prices rise. Miners don’t open a lead mine because silver is hot.
The Volatility Premium
Silver’s dual nature creates explosive volatility:
- In 2020-2021, silver moved from ~$12 to ~$30 (150%+ move)
- Silver routinely moves 2-3x the percentage of gold
- The gold/silver ratio can swing from 40:1 to 120:1
For traders, this volatility is a feature, not a bug — if you can read the signals.
Which ETFs should I watch?
Understanding the key instruments and their relationships is essential for reading the tape:
Primary Silver Plays
| ETF | Name | What It Tracks | Role in Analysis |
|---|---|---|---|
| SLV | iShares Silver Trust | Physical silver | Pure commodity exposure |
| PSLV | Sprott Physical Silver Trust | Physical silver (allocated) | Alternative physical exposure |
| SIL | Global X Silver Miners ETF | Silver mining companies | Equity leverage to silver |
| SILJ | Amplify Junior Silver Miners ETF | Junior silver miners | High-beta miner exposure |
Related Metals & Context
| ETF | Name | What It Tracks | Role in Analysis |
|---|---|---|---|
| GLD | SPDR Gold Shares | Physical gold | Precious metals leadership |
| GDX | VanEck Gold Miners ETF | Gold miners | Equity sentiment comparison |
| COPX | Global X Copper Miners ETF | Copper miners | Industrial demand signal |
What moves first in a silver cycle?
Silver cycles are more complex than copper because of the dual personality. The sequence depends on which driver is dominant.
Industrial-Led Rally (Risk-On)
When silver rallies on economic optimism and industrial demand:
Copper leads
COPX and CPER break out first — industrial demand thesis gains traction.
SIL/SILJ start moving
Silver miners catch a bid as traders anticipate silver following copper’s lead.
SLV catches up
The commodity follows. Physical silver demand accelerates.
Gold lags or moves less
GLD underperforms SLV — the gold/silver ratio compresses.
Fear-Led Rally (Risk-Off)
When silver rallies on monetary/inflation fears:
Gold leads
GLD and GDX break out first — flight to safety trade.
Silver follows with leverage
SLV moves with GLD but with 2-3x the percentage move.
Miners amplify
SIL and SILJ move even more aggressively as equity leverage kicks in.
Copper lags or falls
Industrial metals underperform — this is a fear trade, not growth.
Why identifying the driver matters
The exit signals are completely different:
- Industrial rally: Watch copper and risk appetite. When COPX/SPY rolls over, silver is at risk.
- Fear rally: Watch gold and real rates. When GLD/SPY peaks and rates turn, silver reverses hard.
Getting this wrong means using the wrong indicators and missing the exit.
Which relative charts should I monitor?
Silver’s dual nature means you need more ratios than a simple industrial metal.
Essential Ratios to Monitor
SLV/GLD — Silver vs. Gold (The Gold/Silver Ratio Inverse)
This is the critical ratio for understanding which personality is dominant:
- SLV/GLD rising: Silver outperforming gold — risk appetite strong, industrial bid present
- SLV/GLD falling: Gold outperforming silver — fear trade dominant, silver’s industrial half is a drag
SIL/SLV — Miners vs. Commodity
- Rising: Miners leading — equity investors positioning ahead of the commodity
- Falling: Commodity leading — late-cycle or miners facing cost pressures
SLV/SPY — Silver vs. Market
- Rising: Silver outperforming equities — precious metals bid
- Falling: Risk-on mode leaving silver behind
SIL/GDX — Silver Miners vs. Gold Miners
- Rising: Silver beta outperforming — risk appetite favors silver’s industrial side
- Falling: Flight to quality within precious metals — gold preferred
Secondary Ratios
- SILJ/SIL: Junior miners vs. seniors (risk appetite within silver space)
- SLV/COPX: Silver vs. copper miners (hybrid vs. pure industrial)
- GLD/SPY: Gold vs. market (overall precious metals sentiment)
Reading the Dashboard
| Condition | Interpretation |
|---|---|
| SLV/GLD rising, SIL/SLV rising | Industrial bull — risk-on silver trade |
| SLV/GLD rising, SLV/SPY rising | Full precious rally with silver leadership |
| SLV/GLD falling, GLD/SPY rising | Gold leading — defensive positioning |
| SLV/GLD falling, GLD/SPY falling | No bid for precious — risk-on without metals |
How do I know where we are in the cycle?
What you’ll see:
- SIL/SLV ratio rising (miners outperforming commodity)
- OR GLD/SPY breaking out (if fear-driven)
- Relative charts turning up from oversold
- Low mainstream attention to precious metals
- Gold/silver ratio at extremes (90:1+)
What it means: Smart money is positioning. Watch the driver to know your exit.
What you’ll see:
- SLV catching up to SIL move
- SLV/GLD ratio expanding (silver outperforming gold)
- Media coverage increasing on silver/precious metals
- Gold/silver ratio compressing rapidly (from 90:1 toward 70:1)
- Retail interest picking up (coin premiums rising)
What it means: The thesis is working. Trend followers are joining.
What you’ll see:
- SLV outperforming SIL (commodity leading, miners lagging)
- Gold/silver ratio at lows (sub-60:1)
- #silversqueeze trending, Reddit excitement
- Coin/bar premiums at extremes (30%+)
- SILJ massively outperforming SIL (junior froth)
What it means: Time to tighten stops. Silver rallies end violently.
The Gold/Silver Ratio: Your Secret Weapon
The gold/silver ratio (gold price ÷ silver price) is one of the most useful signals in precious metals:
| Ratio Level | Historical Context | Signal |
|---|---|---|
| 100:1+ | Extreme fear, silver abandoned | Silver historically cheap — contrarian long |
| 80-100:1 | Elevated, gold preferred | Silver undervalued, watch for reversal |
| 60-80:1 | Normal range | Neutral — trade other signals |
| 50-60:1 | Silver outperformance | Getting extended — silver may be peaking |
| <50:1 | Rare, last seen 2011 | Extreme — silver likely overextended |
How to use it:
- At ratio extremes (90+): Look for silver entry signals. The ratio tends to mean-revert.
- Ratio compressing rapidly: Silver is working. Let it run but tighten stops.
- Ratio at lows (<60): Consider taking profits or hedging. Silver reverts hard.
How do I put this all together?
Daily Checklist
- Check SLV/GLD ratio — Is silver leading or lagging gold?
- Check SIL/SLV ratio — Are miners leading or lagging?
- Identify the driver — Is this industrial (watch copper) or fear (watch gold)?
- Check the gold/silver ratio — Where are we historically?
- News scan — WallStreetBets activity? Magazine covers? Contrarian when crowded.
Entry Conditions (Beginning of Move)
- Gold/silver ratio at 80:1+ (cheap on relative basis)
- SIL breaking out with rising SIL/SLV ratio
- Driver identified: GLD leading (fear) or COPX leading (industrial)
- SLV/SPY stabilizing or reversing from downtrend
Exit Conditions (End of Move)
- Gold/silver ratio compressing to 60:1 or below
- SIL/SLV ratio breaking down (miners lagging)
- Retail mania signals (Reddit, premiums, TV coverage)
- Driver reversing: GLD/SPY rolling over (fear) or COPX/SPY rolling (industrial)
Quick reference
| Phase | What to Watch | What’s Happening |
|---|---|---|
Early | SIL leads, G/S ratio 90+, driver emerging | Smart money positioning |
Middle | Both participating, ratio compressing | Trend confirmation |
Late | SLV leads SIL, ratio <60, retail frenzy | Exhaustion approaching |
Related themes
Silver’s dual nature connects it to both precious metals and industrial demand:
Sources
Learn more about the contents of this page by reviewing these sources:
Supply & demand fundamentals
Industrial vs. investment demand: The Silver Institute, “World Silver Survey” (annual). Industrial fabrication ~50% of total demand.
Byproduct production: USGS Mineral Commodity Summaries 2025, “Silver”. Approximately 70% of silver comes as byproduct from lead-zinc, copper, and gold mining.
Geographic concentration: USGS data shows Mexico (24%), China (13%), and Peru (11%) account for ~48% of global mine production.
Solar panel usage: The Silver Institute, “Silver in Solar Energy”. Solar PV demand has grown from ~50 Moz in 2014 to ~160+ Moz.
EV silver content: The Silver Institute, “Silver in the Automotive Sector”. EVs use significantly more silver than ICE vehicles.
Historical price data
Gold/silver ratio history: Historical data shows ratio ranged from ~15:1 (19th century fixed ratio) to 125:1 (March 2020 COVID panic).
2011 silver peak: Silver reached ~$49/oz in April 2011 with gold/silver ratio around 32:1.
2020-2021 move: Silver moved from $11.77 (March 2020 low) to $30+ (February 2021) — a 155%+ move.
ETF information
- SLV: iShares — largest silver ETF, holds physical silver in London vaults
- PSLV: Sprott — physically-backed trust with allocated silver
- SIL: Global X ETFs — tracks Solactive Global Silver Miners Index
- SILJ: Amplify ETFs — junior silver miners, higher beta
- GLD: State Street Global Advisors — largest gold ETF
- GDX: VanEck — gold miners ETF
Industry data
- Silver Institute: silverinstitute.org — publishes annual World Silver Survey and demand studies
- USGS: Mineral Commodity Summaries — annual production and reserve data
- LBMA: London Bullion Market Association — silver price benchmarking and market data