Research & Strategy
Silver in Focus: Strategic Revaluation and Market Potential
10 Nov 2025
Introduction
Topics in this Newsletter
Introduction
Silver: A Dual Function with Strategic Weight
Industrial Relevance: A Metal Without Substitute
Dual Function as a Stability Anchor
Political and Economic Consequences
Market Outlook: Fundamental Support Remains Robust
Risks and Uncertainties Persist
Conclusion
Washington's decision to officially add silver to the United States' "Critical Minerals List" marks a significant milestone for the precious metal. With this, silver—alongside lithium, uranium, and rare earths—is no longer considered merely a raw material but a resource of national economic and strategic importance. This revaluation paves the way for increased government support for domestic mining, subsidies, strategic stockpiles, and an expansion of refining capacities. In an already deficit-driven market environment, a coordinated stockpiling program by both public and private actors could further increase market tightness and support upward price momentum.
Chart 1: XAG/USD Price Development. Silver (USD), 50-day moving average, 200-day moving average. Source: LGT, Bloomberg
Silver: A Dual Function with Strategic Weight
The inclusion of silver in the US list of critical minerals in November 2025 highlights a shift in how policymakers view raw materials that form the foundation of modern industries. The revised approach by the US Geological Survey analyzes hundreds of industries based on disruption scenarios and evaluates the probability and impact of potential supply shocks.
In this assessment, silver stands out—on one hand as an indispensable industrial material and on the other as a classic safe haven in the precious metals sector. This dual function explains why political decision-makers now classify silver as a strategic asset and why market participants increasingly anticipate structural price support.
Industrial Relevance: A Metal Without Substitute
Silver impresses with its physical properties: it is the most electrically conductive element, highly reflective, and naturally antimicrobial. Such combinations are nearly impossible to substitute in high-tech applications. In the real economy, silver is indispensable—in electronics, automotive systems, medical technology, and especially in photovoltaic cells. Solar installations alone absorb nearly 200 million ounces annually, while overall demand has reached a historic high. Primary mine supply is growing only moderately, and recycling cannot fully close the gap between supply and consumption. The result is a structural deficit that is of central importance given silver's close connection to the energy transition and digitalization.
Dual Function as a Stability Anchor
In addition to its industrial role, silver also functions as a financial metal. It often moves in tandem with gold when investors seek protection from inflation, currency devaluation, or geopolitical uncertainty. Central banks have been continuously buying gold for years, which has stabilized prices. Silver benefits indirectly from this dynamic. The combination of industrial base demand and investor safe-haven demand ensures that overall demand remains more resilient across economic cycles.
Political and Economic Consequences
The new classification as a "critical mineral" is also likely to influence trade policy and procurement strategies—especially given the high import dependency and concentration in refining. Companies that previously treated silver as a routine commodity may now focus more on supplier diversification, material efficiency, and recycling from old electronics or solar modules. This provides more concrete incentives for policymakers and industries to identify and mitigate bottlenecks and "single points of failure" in supply chains. While this won't create additional supply in the short term, it will reduce the market's structural vulnerability—and thus the risk of extreme price fluctuations—in the long term.
Market Outlook: Fundamental Support Remains Robust
Although silver is traditionally more volatile than gold and reacts with a lag to market impulses, its fundamental basis is more stable today than in previous cycles.
Industrial demand remains strong, especially from the solar and electronics industries.
Investor demand reacts sensitively to macroeconomic conditions.
And political recognition as a strategic raw material adds a new, structural pillar of support.
This combination makes deep or prolonged price setbacks less likely. Against this backdrop, a price target of around USD 50 per ounce in six months and USD 52 in twelve months appears realistic—supported by tight fundamentals and growing political backing.
Risks and Uncertainties Persist
Despite the positive structural trends, caution is advised. The substitution of high-value applications is technically difficult but possible in specific cases. Mining projects require years to reach production readiness, and recycling must also be scaled up. Trade measures can unpredictably alter flows. These factors call for continuous market monitoring, not a break with the overarching thesis.
Today, silver is clearly seen as an indispensable element of key economic sectors, while its supply chain is considered vulnerable enough to warrant political attention. This does not guarantee "calm waters" but signals a new era in which materials for electrification, health, and digitalization are understood as strategic assets.
Conclusion
The inclusion of silver in the US list of critical minerals confirms what the industry has long known: silver is not just useful—it is essential.
The metal's dual role as an industrial backbone and a safe haven strengthens its market structure in times of political and geopolitical uncertainty. Given ongoing supply deficits and a policy-driven focus on supply security, silver is likely to trade on a firmer, structurally supported basis in the future—acting as a link between tradition and modern technology.