Bullion and a new investment opportunity: Why the fundamentals indicate that Silver is at a critical point

When you talk about precious metals, most people think of gold first. But in the past two or three years, Silver (Silver) has been revived. Not because of cultural reasons, but due to the current era we are in. This year, Silver has been moving strongly, with data from the World Silver Survey 2025 warning that the global market has been facing a continuous (Structural Deficit) for four years.

Why Silver Matters: Before Modern Engineering

Humans have used silver ore as a medium of exchange for over 4,000 years. Not because of its cultural value, but because it is practically useful.

• Around 3,000 BCE, ancient peoples used Silver in the form of rings and standard-weight bars as a representation of value.
• In the 16th century, Spain produced silver coins, which became the first widely accepted currency across the continent.
• Up until 1857 and 1935, Silver remained a legally recognized reserve asset in the United States.

But times have changed. Today, Silver’s role has shifted from currency to something even more valuable.

Bullion in a Changing Economy: Why Nothing Can Replace It

Silver is not just a beautiful metal; it is an essential engineering element. Gold may have cultural value, but Silver has scientific value that cannot be replaced.

• Best conductor of electricity: No element conducts electricity better than Silver, making it the core of all electronic devices.
• Reflective properties: In solar panels, the efficiency of converting sunlight into electricity directly depends on Silver.
• Antibacterial properties: With its germ-killing ability, Silver is used in bandages, medical devices, and water filtration systems.
• Flexibility: For microchips, AI devices, and 5G equipment, Silver’s precise processability is indispensable.

The Silver Market Is Coming: An Imbalance of Supply and Demand

Latest data paints a clear picture: the world needs more Silver than is available.

Surging Demand

The industrial sector alone consumed 680.5 million ounces in 2024, nearly 59% of total demand, especially from:

• Clean energy projects (Solar panels)
• Electric vehicle markets (EV)
• 5G networks and AI infrastructure
• Consumer electronics

Insufficient Supply

On the supply side, production has stalled, mining costs have increased, and inventories have decreased. Byproducts from other mining sectors like copper, lead, and zinc have also shrunk.

Result: The Silver market has been in shortage for four consecutive years.

Investment Comparison: Gold vs. Silver Bullion

If you want a safe asset, gold is the standard choice. But if you seek higher return opportunities, the picture is different.

What does the Gold/Silver Ratio tell us?

The Gold/Silver Ratio (GSR) indicates how many ounces of Silver are needed to buy one ounce of gold.

• During the COVID crisis (March 2020): GSR soared to 124:1 as investors flocked to gold.
• In 2011 (during the bull market): GSR dropped to 31:1 as investors dared to take risks.
• Today: It remains around 84:1, indicating Silver is still undervalued relative to its industrial potential.

Implication: The market has not yet fully priced in Silver’s industrial potential.

Market Size: Volatility and Potential

• Gold market: approximately $30 trillion
• Silver market: approximately $2.7 trillion

A smaller market means that even small capital flows can have a large impact.

Silver’s volatility is 2-3 times higher than gold, meaning in a bull market, Silver can surge more dramatically, but in a bear market, it can fall faster.

4 Ways for Thai Investors to Access Silver Opportunities

1. Physical Purchase: Bars and Coins

Buy and hold real Silver through leading gold and silver traders in Thailand such as Ausiris, MTS Gold, Bowins Silver, and SNP Gold.

Advantages: Genuine assets, no counterparty risk
Disadvantages: High capital requirement, storage costs, insurance, and high (Spread); low liquidity

2. Via Funds or Mining Stocks

Invest through funds like DAOL-SILVER, which track global mining companies such as Pan American Silver, Wheaton Precious Metals, and Fresnillo.

Advantages: High liquidity, no storage issues
Disadvantages: Company-specific risks, prices may not track actual Silver prices

3. Futures Market (TFEX Silver Futures)

Trade futures contracts based on global Silver prices via the (TFEX) futures market.

Advantages: Low capital requirement, (High Leverage), can trade both directions
Disadvantages: Very high risk, suitable only for professional traders

4. CFD (Contract for Difference)

Trade Silver CFDs (XAGUSD) through reputable broker platforms.

Advantages: Low initial investment, (minimum $50), high liquidity, flexible, 24-hour trading, almost weekly, no hidden costs
Disadvantages: Leverage risk, broker risk

Opportunities and Dangers: Both Sides of the Coin

Opportunities

1. High return potential: Greater volatility and high GSR mean Silver could deliver massive percentage gains in a bull market.
2. Industry megatrends: Clean energy, EVs, digital, AI—all require Silver for decades.
3. Affordable entry: Much cheaper than gold, accessible to more investors.
4. Inflation hedge: Long history of preserving value.

Risks

1. High volatility: The same volatility that creates opportunities can also cause losses.
2. Economic sensitivity: During economic slowdowns, industrial demand may decrease.
3. No yield: Only capital appreciation, no dividends.
4. Physical holding costs: If buying physical Silver.

Summary: Is Silver an Opportunity or Just a Trend?

Bullion is no longer just the “poor man’s gold.” It is an indispensable engineering component of the modern world. Amid shortages, strong demand, and a still-high GSR, Silver offers an automatic forward-looking signal.

The real question is not whether Silver will go up or down, but: Are you ready to assess risks and make informed investment choices?

Whatever method you choose, the key is to start learning and making decisions based on data, not emotions.