From Changi vaults to Asian markets, silver rallies even as caution grows

[SINGAPORE] From bullion vaults in Changi to trading desks across Asia, silver has emerged as one of the region’s hottest safe-haven trades, with prices trebling over the past year amid a surge in investor demand.

This comes despite softer demand from industrial and jewellery consumers, as Asian investors drive the market higher on concerns over currency debasement – or the erosion of a currency’s value – and rising government debt.

Rhona O’Connell, head of market analysis for Europe, Middle East and Africa as well as Asia at StoneX, noted that the tightness in Asia’s markets is largely because of over-the-counter buying of bars and coins. 

She described investment-driven demand as the “icing on the cake” for the tightening global availability of silver. 

Industrial usage dipped 3.9 per cent from 30,136 tonnes in 2024 to an estimated 28,957 tonnes in 2025.

O’Connell forecasts a modest recovery to 29,505 tonnes in 2026 as industries adapt to higher prices through recycling and increased efficiency in silver usage. 

She also projected that jewellery demand will decline 7.9 per cent to 5,980 tonnes in 2026, from 6,491 tonnes in 2024.

Even as industrial players reduce their silver consumption and price-sensitive consumers cut back on jewellery, strong investment demand continues to drive a structural deficit, she added. 

“Manic buying”

As investors pile into silver, precious metals dealer Silver Bullion has seen its silver sales treble from its post-pandemic volumes. Since the start of the year, the firm has been transacting up to 15 tonnes of silver a week. 

Silver Bullion operates a 180,000 sq ft facility in Changi. Known as The Reserve, it is designed to vault hundreds of billions of dollars’ worth of bullion. The firm’s clients include individual and institutional investors. 

Vergel Villasoto, a director at Silver Bullion, said that as prices rise, people are “turning away from jewellery and opting for bars and coins for wealth protection”.

While the firm continues to trade and store gold and platinum, silver has become its primary growth driver. The white metal accounted for around 70 per cent of total revenue in 2025, up from about 50 per cent in previous years.

“On some days we’re selling only silver, especially since the manic buying phase began last October with prices moving on an upwards trajectory,” added Villasoto.  

Heidi Sum, global head of product specialists for liquid real assets at DWS, said global consumption of bars and coins reached around a quarter of total silver demand in 2025; the figure continues to climb.

“Silver holdings tend to be shorter-term and more price-sensitive, often increasing during periods of strong momentum, improving growth expectations or falling interest-rate expectations.”

She added that this contrasts with gold, which is often held over long periods as a strategic reserve asset rather than actively accumulated during price rallies.

As a result, silver investment flows often supplement rather than replace gold exposure, particularly when industrial sentiment and monetary conditions are aligned in silver’s favour, she said.

More speculative flows

Beyond investment demand, speculative flows into the futures market have also fuelled silver’s lustrous climb. 

“Since the end of last year, we (have seen) a silver market that is much more driven by flows than fundamentals,” said Carsten Menke, head of next generation research at Julius Baer.

“The flows are increasingly speculative, meaning that they originate primarily from speculative traders in the futures markets rather than safe-haven seekers in the physical market.” As at Monday (Jan 19), there was a premium of US$2.09 on Comex silver futures due in June 2026 over those due in March, reflecting investor appetite for silver. 

Menke noted that despite increasing speculation, safe-haven demand “should stay sound” on the back of projections suggesting slowing US growth, lower US interest rates and a weaker greenback. 

“A continuation of the current momentum could push silver prices even higher and prolong its outperformance over gold, leading the gold-to-silver ratio lower,” he noted. “Conversely, a moderation of speculative flows would likely lead to an underperformance of silver.”

DWS’ Sum added that while the medium-term outlook “remains constructive, increased volatility appears likely, particularly for more cyclical metals such as silver, platinum and palladium”.

Spot silver advanced 3.6 per cent to US$93.35 at 4.12 pm in Asian trading on Monday. Meanwhile, spot gold rose 1.7 per cent to hit US$4,672.68. Platinum and palladium also climbed.