Physical silver investment sees wild swings in the top four global markets
NEW YORK (August 29) The United States, India, Germany, and Australia account for nearly 80% of global demand for silver bars and coins, and this market segment also undergoes the most extreme swings, according to a new report from Metals Focus on behalf of the Silver Institute.
“Physical investment is a structurally important part of global silver demand, and the most volatile,” the Silver Institute wrote in an announcement published Tuesday. “Notably, over the past 15 years, physical silver investment has ranged between a low of 157.2 million ounces (Moz) in 2017 and a record high of 337.6 Moz, established in 2022.”
The analysts said that rising geopolitical tensions and government debt, along with “an increasing investor perception that silver is undervalued compared to gold,” have helped drive the silver price 34% higher this year. “By comparison, the white metal is outperforming gold, which is up 28 percent, and Bitcoin, rising 18 percent year-to-date,” they wrote.
To better understand this dynamic segment of the silver market, the Silver Institute commissioned Metals Focus to produce a new report, “Key Physical Silver Investment Markets,” which examines the four leading markets for physical silver investment: the United States, India, Germany, and Australia.
The findings of the report underline the unique aspects of each major market, including detailed forecasts for bars and bullion coins in each country, along with the various ways demand has shifted in recent years – often dramatically.
The United States is the number one market for physical silver investment, with a level of interest that far exceeds the rest of the world – though Metals Focus analysts predict India will take the top spot in 2025, as it did in 2018 and 2019.
“The scale of US buying has been astounding, with a combined total of 1.5 billion ounces (Boz) of silver purchased by retail investors between 2010 and 2024,” the report noted. “The value of US silver physical investment has averaged around 70% of the value of gold investment purchases, compared to just 6% in the rest of the world.”
The analysts noted that Individual Retirement Accounts (IRAs) remain a significant part of U.S. physical silver investment. “However, precious metals account for a small share of the total IRA market, offering considerable room for IRA silver demand to grow further,” they said.
And Americans who buy physical silver overwhelmingly hold on to it for the long term. “Through late 2023, there was an exceptionally low level of retail liquidations, but these have increased since then,” the analysts wrote. “Even so, US investors still hold much of the 1.5 Boz acquired over the last 15 years.”
Partly as a result of this large multi-year buildup of physical holdings, they said that “demand for newly struck coins and bars has fallen sharply so far this year, with total US retail investment likely to hit a seven-year low in 2025.”
India is consistently the number two global market for physical silver investment, except when it occasionally surpasses the United States. “The country has a long-standing tradition of owning physical silver, typically in the form of silver bars, which in 2024 comprised 70% of total retail demand,” Metals Focus analysts noted, adding that attractive local prices helped drive a 21% increase in retail silver investment last year.
“Between 2010 and 2024, the cumulative demand for Indian bars and coins totaled 840 million ounces,” they wrote.
And Indians are also loathe to liquidate their stores of silver. “Even at today’s higher and sometimes record-setting rupee prices, the scale of selling back has been surprisingly modest,” which the analysts said “reflects how deeply held positive price expectations are in India, with many investors looking for the international price to revisit its record high in dollar terms.”
They also noted the 2022 launch of domestic exchange-traded products (ETP), which initially struggled to gain traction. “That, however, has changed significantly over the past 18 months or so, with holdings (as of end-June) exceeding 58Moz (1,800t), a jump of 51% since end-2024.”
“While these ETPs do offer an alternative route for Indian investors looking to gain exposure to the silver market, our understanding is that instead they have served to broaden the investor base by appealing to those already active in the equities market, who typically might not have bought physical metal,” the analysts added.
Metals Focus said that aside from a one-off demand spike in 2022, last year’s total was the highest since 2015. “This year, we forecast a slight drop as further price gains lead to both profit taking and momentum buying,” they said. “As such, the full year total will still remain historically high.”
Germany has long been the third largest market for retail silver bar and coin purchases – though bullion coins dominate the German retail market, accounting for roughly 80% of sales.
The report noted that German demand has been particularly volatile in recent years.
“Between 2012-18, retail purchases in Germany averaged a relatively modest 24.6Moz/y (764t),” the analysts wrote. “The market then started to recover before surging as first COVID then Russia’s invasion of Ukraine unfolded. As a result, German physical silver investment averaged an eye-watering 48.5Moz (1,510t) during 2020-22.”
German demand during these years also benefited from lower tax rates on non-EU silver bullion coins. “However, the end of favorable tax treatment at the end of 2022 has weighed on the German physical silver market, with German net silver demand slumping by 39 million ounces (Moz) since 2023, and the gold market also seeing a sharp decline,” they said.
Metals Focus has seen a partial recovery to date in 2025 on the back of ongoing economic and geopolitical uncertainty, and they forecast a 25% increase for the full year compared to 2024 German totals, though they acknowledge this would still be “subdued by historical standards.”
And Australia has emerged in recent years to become the world’s fourth-largest market for physical silver investment.
“As recently as 2019, Australian silver coin and bar demand stood at just under 3.5 million ounces,” the analysts wrote. “By 2022, it had surged to a record high of 20.7 Moz.”
Metals Focus lists two key factors that have contributed to the Australian market’s standout growth: “the increasing popularity of investing in silver in retirement accounts and the favorable tax structure applicable to physical silver investment products.”
“[P]ut simply investment-grade silver in Australia is sales tax free, although it is subject to capital gains tax (CGT),” the analysts explain. “Silver invested in retirement accounts attracts different CGT rates if the metal is sold before retirement, but after that point it becomes CGT-free.”
Australian retail silver investment weakened during 2023-24, due in part to profit-taking. “Regardless, it still remained well above pre-2020 levels,” they said. “Furthermore, our forecast sees an 11% rise this year as earlier cost-of-living pressures ease (and so with it less selling back).”
“There also appears a growing perception that silver is undervalued compared with gold, which is therefore attracting renewed interest in silver,” the analysts said.
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