Silver is unusual among precious metals because most of it gets used up. Roughly half of annual silver demand is industrial, and much of that silver is consumed in tiny quantities across millions of devices, dispersed in ways that make recovery uneconomic.
Understanding what silver actually does explains why it behaves so differently from gold.
Why silver, specifically
Silver has the highest electrical conductivity of any element, and the highest thermal conductivity of any metal. It is also highly reflective and has antimicrobial properties.
That combination is why substitution is difficult. Where an application needs maximum conductivity, there is no cheaper material that performs as well, so silver gets used despite the cost.
The main uses
Electronics. Silver appears in switches, contacts, connectors and conductive pastes across an enormous range of devices. The quantity in any single item is minute, which is precisely what makes recovery uneconomic.
Solar panels. Photovoltaic cells use silver paste to conduct the current generated by the cell. This has grown into one of the more significant sources of industrial demand as solar installation has expanded worldwide.
Electrical vehicles and infrastructure. Vehicles use more electrical contacts than conventional ones, and electrification of grids and transport increases demand for conductive materials generally.
Medical applications. Silver's antimicrobial properties see it used in wound dressings, coatings on medical devices and some water treatment applications.
Brazing and soldering. Silver alloys join metals in plumbing, refrigeration and air conditioning.
Mirrors and optical coatings. Silver's reflectivity makes it the material of choice for high performance mirrors.
Why this matters to a buyer
Three consequences follow.
Silver is tied to the economic cycle. When manufacturing slows, industrial silver demand falls with it. Gold has no equivalent exposure, which is the main reason silver is more volatile.
Consumed silver does not return. Gold is hoarded, and almost all gold ever mined still exists in accessible form. A large share of industrial silver is dispersed in quantities too small to recover economically, so it effectively leaves the market permanently.
Demand drivers are not only monetary. Silver responds to solar installation rates, vehicle production and electronics manufacturing, alongside the investment demand that also moves gold.
The supply side
Most silver is not mined on its own. A large share comes as a by product of mining for copper, lead, zinc and gold, which means silver supply responds to the economics of those other metals rather than to the silver price itself.
The practical effect is that a higher silver price does not quickly bring more silver to market, because the mines producing most of it are making their decisions based on something else.
Frequently asked questions
What is silver used for?
Electronics, solar panels, electrical contacts, medical applications, brazing alloys and mirrors, alongside jewellery and investment.
Why is silver used in electronics?
It has the highest electrical conductivity of any element, and no cheaper material performs as well where maximum conductivity is required.
How much silver demand is industrial?
Roughly half of annual demand, which is the main reason silver is more volatile than gold.
Is silver used in solar panels?
Yes. Photovoltaic cells use silver paste to conduct generated current, and this has become a significant source of demand.
Why is most silver not recycled?
Much industrial silver is used in very small quantities dispersed across many devices, making recovery uneconomic.
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