Silver price swings: is it a good investment?

Silver bars sitting in front of bar graph

(Image credit: MicroStockHub via Getty Images)

The price of silver took investors on a wild ride during the opening weeks of 2026.

Silver was one of the standout assets of 2025, outpacing even gold’s gains. The price of gold gained 147% during 2025, and as of 28 January 2026, silver prices were up 64% on where they ended the previous year.

But then, both silver and gold prices plummeted in the final days of January. The silver sell-off was particularly brutal: from an all-time high of $121.67 per ounce on 29 January, the price of silver fell 35% in the next two sessions to close 2 February at $79.45, hitting a low of $71.37 along the way.

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“The precious metals sell-off was triggered by a combination of profit-taking and market reactions to news of Kevin Warsh’s likely selection as the next Federal Reserve chair,” said Mark Burridge, managing partner and fund manager at Baker Steel.

The price of both gold and silver steadied in the following days, with silver climbing as high as $92.21 on 4 February. However, the sell-off underscores the volatility that is part and parcel of investing in silver.

Silver carries much of the same appeal as gold for investors, but benefits from additional demand thanks to its key role in advanced industrial technologies such as artificial intelligence (AI) data centres, electric vehicles (EVs) and solar technology.

While silver tracked gold prices in terms of the direction of movement in late January and early February, its larger swings highlight the fact that it is the more volatile of the two metals.

If you’re deciding where to invest for 2026, does silver make sense now?

Why invest in silver?

While silver, like gold, is a precious metal with a rich history of usage in coinage, in the modern era it is silver’s industrial qualities that have the greatest bearing on its price.

“Historically, there would have been a closer relationship between silver and gold in their end uses,” Robert Crayfourd, portfolio manager of the Golden Prospect Precious Metals investment trust, told MoneyWeek. “But today, silver is over 50% industrial, and that’s primarily going into high-end electronics.”

Anything you can see around you with an on/off switch likely contains silver.

Other industrial use cases include brazing and alloys, the chemicals industry and medical equipment – the latter benefiting from the fact that bacteria cannot grow on silver, an inert ‘noble’ metal.

For these reasons, silver sometimes tracks action in copper prices more than gold.

Many of the same drivers that impact the gold price – financial stress, interest rates, inflation expectations and policy decisions – also influence silver. “You can think of silver as gold on crack,” says Adrian Ash, director of research at BullionVault. “More irrational, more volatile, more dangerous; but also more fun if you’re looking for risk.”

Is now a good time to invest in silver?

Silver is at the heart of boom industries like clean energy, AI and defence.

The Silver Institute, an industry body for the silver industry, and advisory firm Oxford Economics, published a report titled ‘Silver Demand Forecast to Expand Across Key Technology Sectors’ in December. It highlighted three major growth industries that are driving silver demand: solar photovoltaics (i.e. solar panels), electric vehicles (EVs) and AI data centres.

Silver is an important material for all three industries and their pace of growth is fuelling rapidly rising demand for silver.

The supply of silver may struggle to keep pace. While demand for silver is expected to have fallen around 4% in 2025 thanks to tariff uncertainty, it still lags supply, which The Silver Institute expects to remain flat.

That will have made 2025 the fifth successive year in which demand for silver has outweighed supply.

Between 2016 and 2024, total annual demand for silver increased from 992 million ounces to 1.16 billion. Over the same period, supply fell from 1.06 billion ounces to 1.02 billion. In other words, where there was a surplus eight years ago, there is now a deficit.

The boom industries are the main drivers of increasing demand. Total industrial silver demand increased from 491 million ounces in 2016 to a record 680 million ounces in 2024.

So the long-term drivers of silver prices seem supportive. In the short term, the pullback in late January could be viewed as a buying opportunity for investors that worried they had missed the boat.

“Over the past two years, similar episodes of healthy pullbacks in gold, silver and mining equities have repeatedly proven to be constructive buying opportunities for long-term investors,” said Burridge. “These periods of selling have historically been shorter and shallower than many market participants expected, followed by renewed upside as fundamentals reassert themselves.”

One thing to keep in mind when considering investing in silver, though, is its volatility, which its swings from late January highlight. Futures and options speculators call it “the devil’s metal”, says Ash, on account of its propensity to make sudden, sharp moves just as they think they’ve figured it out.

Should you invest in silver or gold?

While gold lacks silver’s range of industrial applications, it has historically been a more reliable store of value.

Their historical significance as precious metals used in coinage means that gold and silver are often directly compared by investors. The gold-silver ratio is reckoned to be the oldest continually-tracked financial ratio in existence. It describes how many ounces of silver are required to buy one ounce of gold. The higher its number, the more expensive gold is currently, compared to silver.

The gold-silver ratio is approximately 55 at the time of writing, having fallen from as high as 104 in April at the height of 2025’s tariff turmoil.

Claudio Wewel, FX strategist at J. Safra Sarasin Sustainable Asset Management, said the gold-silver ratio tends to fall to around 40 at the height of silver’s bull runs, suggesting it is currently relatively expensive compared to gold based on their historical relationship.

He warned that while silver may have further to run in the short term, its volatility means gold looks a safer investment with a longer-term perspective.

“Silver usually experiences much larger drawdowns after an extended rally than gold, owing to its higher price volatility,” Wewel added.

How to invest in silver

There are various ways to invest in silver.

You can, in theory, buy physical silver in the form of silver coins or bars. These, however, incur 20% VAT, and also include 10-15% dealing spreads on top.

“Silver’s popularity is likely to keep increasing, along with the demand for silver coins for investment and keepsake purposes,” said Faisel Ali, founder and managing director of Gold Bank London. “Investors still lean towards bullion coins, but we are seeing more and more interest in themed and commemorative coins, so things that actually mean something to the buyer.”

Specialist custodians can enable you to avoid sales tax while cutting this trading spread too. Using a custodian should also save the expense and risk of storing and insuring physical silver on your own property, as they will normally store your silver in a professional level vault.

Alternatively, you can gain exposure to movements in silver prices by buying a physical silver exchange-traded commodity (ETC). An ETC behaves similarly to an ETF, but it tracks the spot price of a particular commodity, as opposed to a bundle of stocks. The iShares Physical Silver ETC (LON: ISLN), for example, tracks the spot price of silver.

Buying shares in silver miners is another way to invest in silver. However, bear in mind that this is a different and arguably riskier investment than in physical silver or a tracker for the spot price, because while changes in the silver price will impact the share prices of silver miners, they are also exposed to other, unrelated factors, such as company mismanagement.

A combination of both these approaches would be to buy an ETF which comprises silver miners, such as the Global X Silver Miners UCITS ETF (LON:SILV). While doing so may dilute some of the company risk associated with buying individual silver miners, this should still be considered a distinct play from investing in physical silver (either directly or via an ETC).

Golden Prospect Precious Metals (LON:GPM) is an investment trust that invests in a diverse portfolio of precious metal miners. As of 31 December, around 17.1% of its portfolio projects primarily mine silver, compared to 81.8% for gold, 0.9% for platinum group metals and 0.3% for base metals.

Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.