Silver investment surges during first half of 2025

Through the first half of 2025, inflows of silver into ETFs eclipsed the total for the entirety of 2024, reflecting a surge of silver investment demand. 

The average annual price of silver rose 25 percent in H1. That was comparable to the 26 percent gain charted by gold.

Through the first six months of the year, 95 million ounces of silver flowed into ETFs globally. That pushed total fund holdings to 1.13 billion ounces, according to data compiled by the Silver Institute. That’s about 7 percent below the all-time high of 1.2 billion ounces hit in February 2021.

With the rising price of silver, the value of ETF holdings hit a series of all-time highs in June, exceeding $40 billion for the first time.

ETF inflows were relatively constant through the first five months of the year, and then surged in June, with more than half the gains coming in the final month of H1. It was the most significant monthly increase since the Reddit silver squeeze in early 2021.

It’s important to consider the impact of this ETF on a market that is already operating at a supply deficit. Silver demand outstripped new supply for the fourth straight year in 2024 as industrial demand set another record.

A supply deficit means the surging industrial demand must pull from the existing above-ground supply. With investment demand increasing, the two sectors will have to bid against each other, potentially driving the price higher.

ETFs are a convenient way for investors to play the silver market, but owning ETF shares is not the same as holding physical metal.

ETFs are relatively liquid. You can buy or sell an ETF with a couple of mouse clicks. You don’t have to worry about transporting or storing metal. In a nutshell, it allows investors to play the silver market without buying full ounces of metal at the spot price. 

Since you are just buying a number in a computer, you can easily trade your ETF shares for another stock or cash whenever you want, even multiple times on the same day. Many speculative investors take advantage of this liquidity.

But while a silver ETF is a convenient way to play the price of silver on the market, you don’t actually possess any metal. You have paper. And you don’t know for sure that the fund has all the silver either, especially when the fund sees inflows. In such a scenario, there have sometimes been difficulties or delays in obtaining physical metal.

Retail investment was strong in Europe and Asia, but tepid in the U.S.

Retail silver investment in Europe began to rebound last year, and the momentum continued through the first half of 2025. However, the growth comes off a relatively low base, and investment volume still lags the elevated levels seen during the pandemic era.

According to the Silver Institute, the European silver market has benefited from a slowdown in secondary market liquidation, and this has lifted demand for newly minted bars and coins.

India was the primary driver behind strong silver investment in Asia. The Indian retail market posted a strong 7 percent year-over-year gain in H1. According to the Silver Institute, this reflects “strong price expectations.”

In contrast, investors in the U.S. have taken advantage of higher prices to sell silver. According to the Silver Institute, retail demand in the U.S. fell around 30 percent through the first six months of 2024. 

“This dynamic [selling], along with weak retail purchases, has weighed heavily on new bar and coin sales as some U.S. investors have been encouraged by multi-year high prices to book profits. Furthermore, the absence of a crisis in the U.S. (like the collapse of Silicon Valley Bank in 2023) has reduced safe-haven purchases.”

On the futures market, net longs on the CME were up 163 percent in H1. According to the Silver Institute, “Institutional investors have demonstrated a strong commitment to silver as a store of value for much of this year. This is reflected in the average net longs over the first six months of 2025, which achieved their highest level since the first half of 2021.”

The Silver Institute projects strong “two-way activity” in the silver coin and bar market as we move into the second half of 2025. 

“One area of uncertainty, however, is how investors will react should the silver price eclipse US$40. The market could see a mixture of profit-taking by some, while other investors jump in, expecting further price gains.”

Based on both the technicals and the supply and demand dynamics, silver remains underpriced with significant upside. If U.S. investors hop on the bandwagon, it could drive another significant leg up. 

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