On July 31, 2026, the Silver Institute released a mid-year report stating that, driven by demand from solar photovoltaics, 5G communications, and electric vehicles, global silver demand in 2026 is estimated to reach 1.2 billion ounces, up 8.5% year-on-year; however, supply is expected to grow only 2%, resulting in a supply deficit for the fourth consecutive year, with the gap expanding to 120 million ounces, a four-year high. Following the news, international silver prices broke through $42 per ounce, surging over 3% in a single day, once again setting a historical record.

This data not only ignited the global silver market, but also made “storing gold and silver” a hot keyword in asset allocation once again. With inflationary pressures unresolved and geopolitical tensions persisting, why are more and more investors choosing to keep gold and silver in their own safes? Here are five key reasons to help you understand.

Reason 1: Safe-haven appeal stands out more in turbulent times

With the global economic outlook uncertain, trade frictions between the U.S. and China not yet resolved, heightened tensions in the Middle East, and the Russia-Ukraine war at a stalemate, market uncertainty remains high. History has repeatedly proven that gold and silver are among the few assets that preserve or even increase in value when geopolitical risks rise. Since 2026, gold prices have repeatedly hit record highs, and silver has risen in tandem, fully demonstrating its “hero of turbulent times” character.

When stocks, bonds, and other traditional assets are sold off due to panic, funds often flow into the precious metals market as a safe haven. Therefore, allocating a portion of assets to gold and silver is equivalent to buying insurance for your investment portfolio.

Reason 2: Silver’s industrial demand is exploding, dual attributes add strength

Unlike gold, which is primarily used for investment and jewelry, silver has a dual identity as a “safe-haven asset” and an “industrial metal.” According to the Silver Institute report, industrial demand will account for 60% of global total demand in 2026. Among them, the solar photovoltaic industry, driven by active green energy policies, is seeing demand growth of over 15% annually; 5G communication base station construction and electric vehicle battery applications are also consuming large amounts of silver paste and silver alloys.

In other words, even if the global economy slows down and investment demand cools, silver’s industrial foundation can still support prices—an advantage rarely seen among other precious metals. Gold, by contrast, lacks such strong industrial drivers, so in terms of growth potential, silver has the edge.

Reason 3: Gold/silver ratio is high, silver’s upside potential is more promising

The “gold/silver ratio” is an important indicator measuring the relative relationship between gold and silver prices. Currently, the ratio is around 75, higher than the average range of the past decade (around 60), indicating that silver is still undervalued relative to gold. Historically, whenever the gold/silver ratio breaks above 80, silver prices tend to see a significant catch-up rally, sometimes soaring severalfold.

If the gold/silver ratio gradually returns to its historical average in the future, silver’s gains are likely to surpass those of gold. Therefore, silver offers higher capital gains potential, attracting many aggressive investors to include silver in their asset accumulation plans.

Reason 4: Global supply gap keeps widening, inventories continue to dwindle

Supply constraints are the hard foundation supporting silver prices. Most major silver mines worldwide are byproducts of lead, zinc, and copper mines, making it difficult to quickly expand output in response to higher prices. In addition, increasingly stringent environmental regulations and rising extraction costs have nearly stalled global silver mine supply growth.

With demand surging and supply stagnant, the silver market saw its fourth consecutive year of supply deficit in 2026. Inventory data from the London Bullion Market Association (LBMA) shows silver inventories have fallen to their lowest level since 2015. The continued drawdown of inventories provides strong support for silver prices and boosts confidence among investors holding physical silver.

Reason 5: Global central banks shift to easing, real interest rates decline

Precious metal prices have an inverse relationship with real interest rates. At its June rate meeting, the U.S. Federal Reserve signaled a possible 25 to 50 basis point rate cut in the second half. The European Central Bank also continues easing. Major central banks around the world are releasing liquidity, pushing U.S. 10-year Treasury yields lower. Meanwhile, inflation expectations remain elevated, causing real interest rates to fall into negative or low territory.

The real interest rate is the opportunity cost of holding gold; the lower the real rate, the more attractive holding non-yielding gold and silver becomes. Amid expectations that a rate-cutting cycle may begin, market allocation demand for gold and silver has clearly risen, and funds are gradually shifting into precious metals.

How to start accumulating gold and silver?

For general investors, there are many ways to accumulate gold and silver. You can choose based on personal habits and investment goals:

  • Physical gold bars and silver coins: Suitable for long-term holders who value wealth preservation. You can truly own the assets, but storage and security costs need to be considered.
  • Precious metals ETFs: Such as silver ETF (SLV) or gold ETF (GLD), which are easy to trade and highly liquid. Suitable for investors who want to participate in short-to-medium-term trends, though management fees need attention.
  • Systematic gold and silver accumulation plans: Through banks or platforms, buy gold and silver at a fixed amount monthly, averaging costs and lowering volatility risk. Ideal for small investors getting started.

Risk Warning

Although the fundamentals for gold and silver are bullish, investing still carries risks. Silver is more volatile than gold, and short-term prices can fluctuate sharply due to market sentiment or the strength of the U.S. dollar index. The bid-ask spread and liquidity for buying and selling physical precious metals should also be considered. Investors are advised to allocate in batches using idle funds and set stop-losses to avoid over-concentration.

In summary, against the backdrop of inflation, geopolitical tensions, and supply gaps, accumulating gold and silver is no longer just a conservative financial move, but a necessary response to dramatic market changes. Whether you are a newcomer to the market or an experienced investor, appropriately allocating gold and silver will help safeguard your wealth.