Silver Surpasses Gold with Strong Long-Term Growth
Silver has delivered a strong performance over the long term, outperforming gold in terms of growth. The metal's five-year compound annual growth rate (CAGR) stands at 27%, making it the best-performing major asset class over the period.
The difference in demand drivers between silver and gold is significant, with silver benefiting from its use in electronics, artificial intelligence, hardware, and the solar sector. Industrial demand is expected to support silver's price over the long term, although weaker global economic activity could weigh on industrial consumption in the near term.
China plays a major role in the silver market through industrial demand, and the country accounts for around 11% of global silver reserves and controls 60-70% of refining capacity. China's refining restrictions could create bottlenecks in the global silver supply chain, making it an additional source of support for the metal.
Gold, on the other hand, continues to draw support from central banks, reserve diversification, and its safe-haven role. However, higher real yields have emerged as a key headwind for gold, limiting its traditional safe-haven appeal even as geopolitical tensions remain elevated.