Is Silver Still Money, Or Has It Now Fully Become An Industrial Commodity...

Perhaps it’s not surprising that there’s so much disagreement about how much silver is actually worth, given that there’s a large debate as to whether silver is still a monetary metal, or if it’s just a pure industrial commodity at this point.

Which is a reasonable question, as silver obviously has a long history as money in (and outside of) the US, as well as growing industrial demand. And while we’ve seen an increase in the usage of gold as a monetary reserve, especially since Russia was kicked out of the SWIFT system and sanctioned in 2022, the situation in silver is a bit more complicated.

(Chart courtesy of Gold.org)

According to data from The Silver Institute, when accounting for physical investment and ETF demand, the silver market has already been in a deficit for the past five years, with one of the larger deficits in history forecast for 2024.

You can also see in this chart that while net investment demand has risen since COVID, it hasn’t ‘surged’ like we’re in a monetary crisis. And aside from 2022, it’s remained lower than the 309 million ounces reported back in 2015.

So while there’s a yearly deficit, it’s been driven more by growing industrial demand (solar panels in particular) rather than a big spike in monetary demand.

Does this mean that silver’s now purely an industrial commodity?

Well…not exactly.