Silver to be Listed as Critical Mineral

Some big news in the silver market this week – and I’m not just talking about how we just hit $40 an ounce on the silver price – but more on that in a moment. The other noteworthy development for the white metal is that the U.S. Department of the Interior wants to add silver to its list of critical minerals. The list guides federal strategy, investment, and mine permitting decisions.

Inclusion on the list can make projects eligible for federal funding, subject to a streamlined permitting process, or more competitive due to fees placed on imports.

The draft notice includes 54 minerals, recommending the addition of potash, silicon, copper, silver, rhenium, and lead, along with the removal of arsenic and tellurium.

The Department of the Interior analyzes supply chain vulnerabilities as part of the list creation process. 

Interior Secretary Doug Burgum said the list of critical minerals "provides a clear, science-based roadmap to reduce our dependence on foreign adversaries, expand domestic production, and unleash American innovation.”

The inclusion of silver on the list of critical minerals underscores the growing importance of the metal and could signal worries about the lack of domestic supply.

Adding silver to the list could benefit domestic silver miners by streamlining permitting and easing some of the regulatory burden.

Silver conducts electricity better than any metal at room temperature. That makes it a vital input in the electronics and computing sectors. For instance, silver is an important component in solar panels, accounting for at least 20% of total silver consumption each year.

Silver is also crucial in defense applications. The world’s militaries use a substantial amount of the metal, although exact numbers are difficult to pinpoint due to the secretive nature of the military-industrial complex.

About 60 percent of global silver offtake is for industrial purposes. Industrial demand for silver set a record last year, and it continues to grow.

Meanwhile, the silver supply has become increasingly tight. Demand outstripped the silver supply for the fourth consecutive year in 2024. 

Sagging supply is likely one of the factors driving the decision to include silver on the list of critical minerals.

Metals Focus forecasts that while we will see record silver prices over the next five years, mine supply growth is likely to remain modest, with only minimal increases globally.

The reason that silver production doesn't ramp up to meet the demand and take advantage of these higher prices is because more than half of silver is mined as a byproduct of base metal operations.

In other news, the establishment financial media was in a tizzy this week over President Donald Trump's firing of Fed Governor Lisa Cook, a Biden appointee accused of mortgage fraud. They complain that this firing is an assault on the Fed's independence.

In reality, though, the notion of 'Fed independence' is a myth.

Most recently, the Fed played politics last year by slashing rates to stimulate the economy heading into a tough presidential election for the incumbent Democrats.

And the Fed suddenly got stingy as soon as Trump got elected -- halting rate cuts for almost a year so far.

But here's the big picture...

The Federal Reserve is an inherently political institution -- not only because the seven members of its Board of Governors are appointed by the President with Senate confirmation, but also because America's entire monetary system is political in nature.

We no longer have sound money backed by gold but political money, where policymakers centrally plan the economy via market interventions -- including changes to monetary policy.

By design, the Fed engages in price fixing activity by setting the price of money (i.e., interest rates) -- and it bails out the federal government by funding its debt when market participants will not.

Since the Federal Reserve was launched in 1913, the value of the currency has plunged 99%.
On the other hand, inflation was almost non-existent throughout the first 125 years of our constitutional republic, when the dollar was defined as a particular weight of gold and silver -- and there was no permanent central bank.

It seems today the Fed 'losing its independence' is code for the Fed "cutting rates at the same time Trump wants it to do so."

In reality, though, Wall Street also desires lower interest rates right now.

The federal government appears desperate for lower rates, too, since its annual debt service costs are now well above $1 trillion and rising. After all, the Treasury needs to refinance over $10 trillion in federal debt by next year, not counting the need to finance the current budget deficit.

For these and other reasons, lower rates appear inevitable.

This means we should soon expect a period of more steeply negative real interest rates where the true inflation rate is higher than interest rates. And that's rocket fuel for gold.

The Federal Reserve System has played a key role in getting us into the current predicament of inflation, runaway federal spending, and runaway debt.

The purchasing power of the Federal Reserve Note against real assets, especially gold and silver that cannot be printed or debased, continues to be on the chopping block. Americans would be wise to prepare accordingly.

Let’s take a look at the weekly market action in the metals. Gold is up $75 for the week now to come in at $3,459 an ounce, good for a weekly gain of 2.2%.

Silver meanwhile is pushing up above $40 and is up nearly $1 or 2.5% and currently checks in at $40.04 as of this Friday late morning recording.

The PGMs are fairly muted this week, with platinum unchanged at $1,373 and palladium off 2.1% to trade at $1,128 an ounce.

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