Should You Buy Silver While It's Under $100? The Answer Might Surprise You

The price of an ounce of silver surged by 144% in 2025, as investors piled into precious metals to hedge against rising economic and political uncertainty. It carried its momentum into 2026 and set a new record high of $121 per ounce in January, but it has since plummeted by 38% to trade at just $75 per ounce as I write this in early April.

Unlike its close sibling, gold, silver is used extensively in industrial settings, with the majority of its demand coming from manufacturers of electronics, alloys, solders, and more. Therefore, its price is highly sensitive to changes in economic conditions. With geopolitical tensions raging in the Middle East and oil prices soaring, investors might be selling silver on fears of a global economic slowdown.

Overall, precious metals have been a reliable investment over the long term, so investors might be wondering if they should buy silver while it's trading under the $100 milestone. Read on for the surprising answer.

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A supply-demand story

Many investors buy silver because of the perception that precious metals appreciate in value over time. In fact, some investment houses cater to this demand by offering exchange-traded funds (ETFs) like the iShares Silver Trust (NYSEMKT: SLV), which allows buyers to profit from silver's upside without the inconvenience of stockpiling physical metal.

But in 2024, investors accounted for just 21% of the total demand for silver, so they simply aren't a very influential part of the market. Industrial manufacturers, on the other hand, typically soak up more than half of all available supply each year, so they play a much larger role in silver's performance.

China is the world's second-largest exporter of silver behind Hong Kong, and last year, it announced a series of restrictions on how much of the precious metal could be shipped out of the country. The export controls stoked fears of a global silver shortage, which contributed to the metal's blistering 2025 performance.

China is one of the world's top electronics manufacturers, so the country is simply trying to protect its domestic supply chain. But the restrictions also add leverage to increasingly intense global trade negotiations with other economic superpowers like Europe and the U.S. As things stand, the export controls will remain in place throughout 2026 and 2027, which could support higher silver prices.

Modest returns are likely from here

In my opinion, gold is a much better option for investors who want exposure to precious metals. It's incredibly scarce, with just 219,890 tons pulled out of the ground throughout human history, compared to over 1.7 million tons of silver. Plus, gold has been a recognized store of value for thousands of years, with consumers, central banks, and governments continuing to stockpile the metal to this day.

For investors who already own gold, buying silver might be a good way to diversify. However, it's important for these investors to temper their expectations, because its 2025 return of 144% certainly was significantly above average. In fact, silver has delivered a compound annual return of just 5.8% over the last 50 years, which is a more realistic target for investors going forward.

Volatility is another important consideration. After peaking in 1980, silver lost almost 90% of its value and didn't recover for a staggering 31 years. It eventually set a new record high in 2011, but it then suffered another collapse of 71%. Investors had to wait 14 years from that point for a new all-time high, which came in 2025.

Therefore, history suggests that silver's 38% decline from its recent peak might actually get worse in the near term. A global economic slowdown due to higher oil prices could hurt demand for industrial metals in general, and drive further downside in silver. That means investors who buy the precious metal today should aim to hold it for the very long-term -- potentially a decade or more -- to maximize their chances of earning a positive return.

Using an ETF like the iShares Silver Trust can minimize holding costs and maximize convenience over that period. It can be bought and sold with a few clicks through any major investing platform, whereas large quantities of physical silver can be tricky to offload in a pinch. Plus, physical metal requires ongoing storage and insurance, which can get expensive. The iShares ETF has an expense ratio of 0.5%, so a $10,000 investment would incur a simple $50 annual fee.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.