The global silver investment market has been marked by volatility, with substantial demand shifts observed in the four largest markets: the United States, India, Germany, and Australia. Together, these countries account for nearly 80% of global demand for silver bars and coins, with fluctuating trends highlighting the volatile nature of physical silver investment. According to a recent report by Metals Focus commissioned by the Silver Institute, the demand for physical silver has been influenced by geopolitical tensions, inflation concerns, and local economic factors.
Record-Breaking Demand and Volatile Trends
The report underscores that over the past 15 years, the demand for physical silver has fluctuated drastically. While 2017 recorded the lowest demand at 157.2 million ounces (Moz), 2022 saw a historic peak of 337.6 Moz, reflecting how market sentiment and external factors influence silver’s role as a store of value. A significant contributor to this volatility has been inflation concerns and geopolitical developments, both of which are expected to continue shaping the market in the coming years.
U.S. Silver Investment: A Dominant Force
The United States is currently the largest market for physical silver investment, with demand far surpassing other regions. According to Metals Focus, U.S. retail investors have purchased a staggering 1.5 billion ounces of silver from 2010 to 2024. This demand is largely driven by individual retirement accounts (IRAs) and long-term holdings. However, recent reports indicate that U.S. silver investment has slowed, with demand expected to hit a seven-year low in 2025. This decline can be attributed to the build-up of physical holdings over the years, leaving limited room for further growth in the short term.
Despite this, silver remains a popular option for long-term investors in the U.S., with many retaining their investments even as silver prices fluctuate. The future of U.S. silver investment will likely hinge on the broader economic outlook and potential shifts in global demand.
India’s Growing Silver Appetite
India has consistently been the second-largest market for physical silver investment. However, there have been fluctuations, with India occasionally surpassing the U.S. in terms of silver demand. In recent years, demand for silver bars has been on the rise in India, accounting for 70% of total retail demand in 2024. Notably, India has seen a surge in silver demand following attractive local prices, with retail silver investment increasing by 21% last year.
The Indian market’s preference for silver as a store of value, along with the relatively modest levels of selling back, demonstrates the country’s strong cultural affinity for the precious metal. Moreover, the introduction of domestic exchange-traded products (ETPs) in India has helped expand the investor base, attracting those involved in the equities market to diversify into silver.
Germany’s Volatile Silver Market
Germany, traditionally the third-largest market for retail silver, has experienced significant volatility in recent years. Retail purchases in Germany averaged 24.6 million ounces per year between 2012 and 2018, but saw a dramatic increase in demand during the COVID-19 pandemic and the onset of the Russia-Ukraine conflict. This period saw German physical silver investment average 48.5 million ounces annually from 2020 to 2022.
A favorable tax structure for non-EU silver coins further incentivized demand, but this tax treatment ended in 2022, causing a noticeable drop in demand for silver in Germany. Despite a 39-million-ounce decrease in demand since 2023, Germany has seen a partial recovery in 2025, with an expected 25% increase in investment demand compared to 2024. However, this recovery is still subdued by historical standards, suggesting that geopolitical uncertainty and economic conditions will continue to influence market sentiment.
Australia: A Rising Silver Investment Market
Australia has emerged as a significant player in the physical silver investment market, with demand seeing impressive growth in recent years. The country’s silver coin and bar demand surged from 3.5 million ounces in 2019 to a record high of 20.7 million ounces in 2022. This rise can be attributed to the favorable tax structure, which exempts investment-grade silver from sales tax, making it an attractive investment option for retirement accounts.
Despite a dip in demand in 2023-2024 due to profit-taking, Australia’s silver investment market remains well above pre-2020 levels. The market’s growth has been fueled by a growing perception that silver is undervalued compared to gold, as well as the easing of cost-of-living pressures. This perception has led to renewed interest in silver, positioning Australia as a key market to watch in the coming years.
Key Factors Driving the Silver Market
The global silver market is heavily influenced by a combination of economic, geopolitical, and market sentiment factors. Some of the most significant drivers of silver demand include:
- Inflation Concerns: Rising inflation risks, driven by factors like government debt, geopolitical tensions, and currency devaluation, have strengthened silver’s role as a hedge against inflation.
- Geopolitical Tensions: Events like the Russia-Ukraine war and U.S.-China trade tensions have prompted investors to seek safe-haven assets, boosting silver’s appeal.
- Industrial Demand: Silver’s use in industries like renewable energy, electronics, and solar technology has been a growing factor in its demand. India’s strong photovoltaic (PV) demand, particularly for solar cells, has contributed to the increasing need for silver in industrial applications.
- Investor Sentiment: A shift in investor sentiment, particularly in regions like Asia and the U.S., has spurred interest in silver. The expansion of silver exchange-traded products (ETPs) and growing recognition of silver’s value as an investment tool are key catalysts for future growth.
Looking Ahead: Silver’s Role in the Global Market
Silver’s strong performance in key markets like the U.S., India, Germany, and Australia highlights its importance as both a safe-haven asset and an industrial metal. While each market has its own unique dynamics, the convergence of inflation concerns, geopolitical risks, and investor sentiment points to a continued upward trend in silver demand.
Looking forward, the market will likely see sustained growth in demand for silver, particularly in industrial sectors and emerging economies. The global investment in silver is expected to rise as investors seek to diversify their portfolios and protect their wealth against inflation and economic uncertainty.
As silver’s market becomes more global, with increasing interest from both institutional and retail investors, its role as a fundamental asset in the global financial system is expected to strengthen. For investors, the ongoing volatility in the market presents both opportunities and risks, but the long-term outlook for silver remains positive, driven by its unique position as a valuable commodity across multiple sectors.
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