Bar (Silver) - An overlooked investment opportunity or a trend that will change the precious metals market?

In recent times, silver has become the focal point of discussions in the international investment community, as its price soared to levels not seen in many years. Part of this is because many analysts are beginning to realize that Silver is not just a traditional safe-haven asset, but a necessity for the development of new-era technologies.

The History of Bullion and Why It Matters Today

To understand the importance of bullion today, we need to look back at its history. Humans have used Silver as a medium of exchange for over 4,000 years.

Archaeological evidence shows that Silver was used in the form of rings and bars with standard weights as far back as 3000 BC. Later, in the 16th century, when Spain discovered large ore deposits in the Americas, they began producing silver bars into coins, which became the first widely accepted currency across multiple continents.

Until 1935, when the silver standard system ended, Silver played an official role. However, today its value is making a strong comeback because its chemical and physical properties have become central to modern systems.

Why Silver Is Becoming the Fuel of the Future

The surge in Silver prices is no coincidence but a result of its irreplaceable properties.

Electrical Conductivity: Silver has the best natural electrical conductivity, making it an essential component in all electronic devices, from mobile phones to many others.

Reflective Efficiency: Silver’s excellent light reflection enhances the efficiency of solar panels, a key component in developing clean energy.

Antibacterial Properties: In modern medicine, Silver is widely used in wound dressings, surgical tools, and water filtration systems.

Flexibility: It allows Silver to adapt well in creating microelectronics and complex small parts.

All these indicate that Silver is not just a valuable metal but a key to unlocking advanced technological development.

The Current Silver Market – Ongoing Structural Deficit

According to the recently published World Silver Survey 2025, the Silver market is facing a “structural deficit,” meaning supply is inflexible compared to surging demand.

Macroeconomic Drivers

Monetary Policies: The interest rate cuts in 2025 have created favorable conditions for precious metals, shifting investment towards Silver.

Exchange Rates: When the US dollar weakens, investors using other currencies can buy Silver at lower prices, boosting demand.

Economic Uncertainty: During periods of inflation and global political turmoil, Silver is viewed as a risk-hedging asset.

Fundamental Factors – The Game of Supply and Demand

High demand is driven by the industrial sector, especially from solar energy, electric vehicles, 5G, and AI technologies. In 2024, total demand reached 680.5 million ounces, with nearly 59% managed by the industrial sector.

Meanwhile, Silver supply cannot fully meet this rising demand. Mine production has slowed, and global inventories are continuously decreasing.

Comparing Gold and Silver – Why Silver Is Becoming More Attractive

Gold/Silver Ratio – A Valuation Indicator

The GSR indicates how many ounces of silver are needed to buy 1 ounce of gold. Currently, this ratio is about 84:1, significantly higher than the historical average.

This suggests that Silver’s fundamental value has not been fully appreciated relative to gold.

Market Size, Volatility, and Role

The gold market is valued at approximately 30 trillion USD, compared to Silver’s about 2.7 trillion USD. The smaller market size indicates that when capital flows in, Silver’s price movements tend to be 2-3 times more volatile than gold.

For this reason, Silver has greater potential for higher returns in a bull market (Bull Market) compared to gold.

Role Differences

Central banks worldwide hold gold as reserves, whereas Silver is not viewed in this way. Instead, Silver is more closely linked to economic and industrial cycles.

4 Ways to Start Investing in Silver

Method 1: Physical Bullion and Coins

The most traditional investment method, where Thai families can purchase bullion or silver coins from reputable local dealers.

Advantages: You own a tangible asset; no counterparty risk.

Disadvantages: High capital requirement; storage, insurance costs; low liquidity.

Method 2: Mutual Funds and Mining Company Stocks

Investors can invest through funds focusing on shares of leading global silver mining companies like Pan American Silver, Wheaton Precious Metals, or Fresnillo.

Advantages: High liquidity; no need for storage.

Disadvantages: Company-specific risks; stock prices may not always follow Silver prices globally.

Method 3: Futures Contracts

For experienced investors, trading Silver Futures via futures markets.

Advantages: Low initial capital (high leverage); profit in both bull and bear markets.

Disadvantages: Very high risk; suitable only for those with deep derivatives market knowledge.

Method 4: CFD Contracts (Contract for Difference)

A popular method among retail investors due to high flexibility.

What is it: Contracts that allow speculation on Silver price differences, often shown as XAGUSD, without owning the actual Silver.

Advantages:

• Low initial capital (leverage)
• High liquidity; easy to open/close positions
• Profitable in both rising and falling markets
• No hidden storage costs

Disadvantages:

• High leverage risk
• Counterparty risk (must choose a reliable platform)

Comparing the 4 Investment Methods

Pros, Cons, and Investment Concepts for Silver

Advantages

High return potential: Due to volatility and high GSR value, Silver can offer higher percentage gains in a bull market than gold.

Long-term demand: The clean energy, AI, and electric vehicle megatrends will continue to drive Silver demand for years.

Accessible pricing: Per-ounce prices are many times lower than gold, making it more accessible to retail investors.

Inflation hedge asset: Like gold, Silver helps protect against paper money devaluation.

Disadvantages

High volatility: Can cause significant short-term losses.

Economic sensitivity: Over 50% of demand comes from the industrial sector, making Silver sensitive to economic slowdowns.

Holding costs: Physical bullion ownership entails storage, insurance, and security risks.

No regular income: Does not pay interest or dividends; returns depend solely on price movements.

Summary

Bullion is no longer an insignificant asset but has become a vital component driving the digital economy and clean energy world.

For investors considering adding this asset class to their portfolio, understanding market structure, fundamental factors, and suitable investment methods for their situation is essential.

A key takeaway is that investing in Silver is a speculative endeavor; success depends on thorough research, careful risk management, and a clear investment plan aligned with long-term personal goals.