Could silver be the new gold for investors?

SINGAPORE - I started investing in gold in 2023, when it was still trading at around $2,500 an ounce.

Since then, the yellow metal has been on a tear – now trading above $5,100 – thanks to talk of sustained rate cuts, geopolitical jitters and a US government shutdown. 

With gold prices now worth a hefty chunk of my pay cheque, I figured it was time to turn my attention to its less flashy but more affordable sibling: silver.

Gold has dazzled investors in the past two years, but silver has been having a quiet moment of its own. The “less glamorous” metal has actually outshone gold in 2025, jumping nearly 60 per cent compared with gold’s 40 per cent-or-so price rise. 

Still, gold continues to hog the limelight. It’s about 82 times more expensive per ounce than silver, which can somewhat create the illusion of better returns, and it’s the default asset to invest in during times of uncertainty.

But just like gold, silver is also a hedge against inflation and uncertainty. It’s also known for its industrial use, finding its way into everything from medicine to electric vehicles.

So to put theory into practice, I decided to buy a couple of one-ounce silver coins from a local dealer. I bought them at $57 apiece and, luckily for me, they are trading at around $62 at the time of writing.

I did not feel less glamorous buying a less glamorous metal, but I learnt that because silver is cheaper, the premiums – or the mark-up dealers charge on top of the market price – are higher. I paid roughly 6 per cent more per ounce, compared with about 3 per cent for gold. 

Based on my checks at several bullion dealers across Singapore, the gap widens with heavier bars – a kilo of silver, which trades at around $2,150, still comes with at least a 6 per cent premium, while a kilo of gold, which trades at roughly $164,700, carries a less than 0.5 per cent mark-up. 

Still, at about $62 an ounce – versus gold’s $5,100 an ounce – silver’s sharper gains this year raise the question of whether it could be the “new gold”, or simply a more affordable way for younger investors to get started in precious metals.

Analysts say that silver will continue to benefit from the spillover of the gold rush, with limited supply and rising industrial demand likely to drive prices even higher.

Mr Vasu Menon, managing director for investment strategy at OCBC Bank, notes that silver possesses the highest electrical and thermal conductivity of all metals, which makes it especially important in products such as electric vehicle batteries and solar panels.

“As the demand for electric vehicles and solar energy continues to rise, demand for silver should rise and this is likely to further support prices,” he says.

“The potential resolution of conflicts in Ukraine and Gaza, at some time in the future, could lead to significant demand for silver due to reconstruction efforts, which augurs well for the precious metal.”

According to the Silver Institute, demand for the metal outpaced supply by about 17 per cent on average between 2021 and 2024, and the market is still in deficit in 2025.

Mr Menon says that strong demand for silver has strained global supply, as primary silver mines, or mines with silver as the main product rather than a by-product of lead, zinc and copper mining, are few and far between.

Disputes and strikes have also disrupted production, including mine closures in South America in 2023 and a three-year strike at a silver mine in Idaho in 2017 over alleged unfair labour practices.

In recent years, the number of new silver discoveries has also declined, leading to lower overall output.

“With the global push towards a low-carbon future, silver demand is expected to increase in tandem with strong growth expected in the solar sector amid a supply deficit,” says Mr Menon.

“If gold prices head much higher, we could see silver also enjoying more upside due to spillover interest.”

“But silver prices can experience larger short-term moves in both directions compared to gold’s steadier characteristics due to central bank and institutional support, therefore a strategy of buying silver gradually over time may be better than lump-sum investing, given its volatile nature,” he adds.

Mr Goh Jun Yong, investment strategist at DBS Bank, says silver has edged ahead of gold this year and could extend its lead, given the US Federal Reserve’s dovish stance and stronger risk appetite in markets, which tend to benefit more volatile commodities like silver.

“Lower rates will likely boost global growth prospects as well, which should support the industrial portion of silver demand,” he says.

Mr Gregor Gregersen, founder of precious metals dealer Silver Bullion, says gold and silver are both seen as safe-haven assets. But silver trades in a much smaller, less liquid market than gold, so even modest inflows can move prices sharply.

“During precious metal bull markets, gold tends to increase in price first. Then, as gold becomes more popular, silver prices tend to surge as more investors rediscover it as an investment,” he says.

Mr Gregersen says the amount of silver young investors should buy depends on the purchaser.

But he recommends going heavier while the gold-silver ratio is above 70 as this means silver is cheap relative to gold – it currently takes about 82 ounces of silver to buy one ounce of gold.

“Purchases can be reduced when the ratio falls,” he adds.

I think I’ve become a more defensive investor in recent years, gradually trimming my holdings in US tech stocks bought between 2021 and 2022, and reallocating the profits to gold and stable currencies such as the Swiss franc.

When it comes to silver, I’m keeping things small for now – adding bit by bit and viewing it as a long-term complement to gold.

Is silver the new gold? It’s hard to say for now, but in a market that loves shiny things, the less shiny metal has earned its spot in a small corner of my safe deposit box for now.