Gold 0.21%
£3,281.24 OZ
Silver -2.37%
£48.97 OZ
Platinum -0.49%
£1,351.59 OZ
The Silver Britannia is capital gains tax free in the UK, making is a very popular choice with UK investors
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Silver is once again flirting with the $30 per ounce mark—a price level that, remarkably, echoes highs not seen since the early 1980s and again during the 2011 commodities boom. While inflation has driven up the prices of many other commodities and assets over the years, silver’s persistent underperformance in real terms baffles many investors.
One major reason lies in the fundamental structure of its supply: unlike gold or copper, silver is often a secondary output—a byproduct—of mining for more commercially dominant base metals like copper, lead, and zinc.
Unlike gold, where production is mostly the result of focused, targeted mining operations, over 70% of silver mined globally is a byproduct of other mining activities. In essence, silver is being mined unintentionally, and this “accidental” supply is having a major impact on its price. Even when silver prices are low, base metal miners continue operations to extract copper, zinc, or lead, and silver simply comes along for the ride. This results in a constant, inelastic stream of silver hitting the market regardless of the metal’s spot price.
This oversupply dynamic helps explain why silver has struggled to achieve sustained gains, even in inflationary or bullish commodity cycles. As base metal mining expands due to rising demand for industrial and green energy infrastructure, so too does the volume of silver entering the market—whether it’s needed or not.
In these and many other polymetallic deposits, silver tends to occur in sulfide minerals like galena (lead sulfide) and sphalerite (zinc sulfide), where it can be economically recovered through smelting and refining. Because these processes are optimized for the primary metals, the recovery of silver is relatively low-cost and practically guaranteed, regardless of silver’s prevailing market price.
In 2024, global silver mine production rose slightly to approximately 819.7 million ounces, up 0.9% from the previous year. This increase was underpinned by higher output from lead/zinc mines in Australia and the recovery of supply from Mexico, particularly as Newmont’s Peñasquito mine returned to full production
Mexico remained the world’s leading silver producer, contributing about 185.7 million ounces in 2024. Other major producers included China, Peru, and Chile, with significant contributions to the global total. Importantly, many of these countries’ silver outputs were not from pure silver mines but from large-scale operations focused primarily on other metals.
Peru’s Antamina mine—one of the largest producers of copper and zinc—also yields substantial amounts of silver as a byproduct. Though silver is not the primary target, the sheer scale of mining activity means large volumes of silver inevitably enter the global supply chain.
Similarly, in Poland, KGHM’s copper mining operations produce considerable quantities of silver, with some estimates suggesting it is among the top five silver producers globally despite silver being secondary to copper.
Another key example is the Bingham Canyon Mine in Utah, USA, operated by Rio Tinto. This massive open-pit copper mine also produces significant quantities of silver as a byproduct, alongside gold and molybdenum. In Canada, Hudbay Minerals’ operations in Manitoba and the Flin Flon district have historically yielded silver from their polymetallic base metal ore bodies
Silver’s industrial demand is undoubtedly strong. It is essential in electronics, solar panels, medical equipment, and electric vehicles. And yet, despite this growing demand, silver remains locked in a price range that has barely changed in decades. At around $30, silver is trading at nominal levels comparable to its 1980 and 2011 peaks. When adjusted for inflation, today’s silver is actually worth far less than it was at either of those historical highs.
Part of the reason is investor psychology. Silver is often viewed as “gold’s poor cousin”—an asset that may catch fire during speculative manias but fails to maintain value during steady-state market conditions. This has led to a lack of consistent investment interest, making silver more vulnerable to supply gluts and short-term sentiment shifts.
Another major factor is the speculative nature of commodity trading. Futures markets, where most commodities are traded, allow for high leverage. A trader can control a large contract size with relatively little capital. This leverage amplifies both gains and losses, attracting short-term speculators and hedge funds looking for quick returns. During a rally, the influx of leveraged capital can cause prices to move irrationally high. When the tide turns, leveraged positions are quickly unwound, leading to cascading margin calls and forced liquidations, which accelerate the price drop.
Market psychology also plays a crucial role. When a commodity begins to rally, the story behind it often becomes sensationalized. Media coverage, social media chatter, and investment newsletters can all amplify the narrative. This creates a feedback loop of enthusiasm and FOMO (Fear of Missing Out), where investors chase returns without regard to fundamentals. At the top, everyone is convinced the price can only go higher—until it doesn’t. Once doubt creeps in, sentiment changes rapidly, and the selling can be as frenzied as the buying was.
Investing in Silver
Silver Britannia coins are the most popular Silver bullion coins in the United Kingdom. They are capital gains tax free and come with advanced security designs for buyer’s peace of mind
