Australian investors have poured record sums into silver exchange-traded funds (ETFs) over 2025, with flows setting a new benchmark for the precious metal’s popularity.
According to Global X, silver ETFs listed on the ASX have drawn $192.7 million in net inflows year-to-date, outstripping full-year totals of $80 million in 2020 and $67 million in 2024.
The firm stated this momentum reflects both short-term market dynamics and long-term supply and demand fundamentals.
Speaking to InvestorDaily, Global X investment strategist Justin Lin said silver is benefiting from a dual narrative.
“It’s both a tactical and structural story,” he said. “Tactically, silver is riding dual tailwinds: gold’s strong momentum and the economic boost expected from rate cuts.
“Structurally, the metal is on track for a supply deficit for its seventh consecutive year, while industrial demand keeps rising driven by its critical role in solar, batteries and electronics.
“Together, these factors put silver in a highly constructive position, with both near- and long-term catalysts pointing clearly to the upside.”
Global appetite for silver ETFs appears to have broadened this year, Lin told InvestorDaily, highlighting Global X’s ETPMAG product which has secured around $200 million in inflows locally. Meanwhile, US physical silver ETFs have attracted more than US$1.5 billion, their largest take-up in at least five years.
Globally, silver ETF inflows stand above US$5.4 billion this year, a multi-year record.
“Clearly the momentum is broad-based,” Lin said.
Lin added that inflows are being driven by a mix of investors, with retail investors in the US having long held an affinity for silver given its volatility.
“But with gold’s strong returns recently, institutional investors are also starting to take interest,” Lin said.
Moreover, performance metrics suggest further upside, with silver’s relative value to gold remaining key.
“There’s no particular level that gold must hit for silver to fly. Instead, the gold silver ratio is a metric we’re watching closely,” Lin said.
“Thus far this year, it has held around 90x, a level investors appear comfortable with when economic conditions are still uncertain. But if [the] economic outlook were to improve meaningfully, say, with the incoming US Fed rate cuts, the appropriate level for that ratio could sit much lower, around 70x.”
Lin further stated that historical data supports strong returns from this point.
“We performed an analysis recently that showed silver’s average forward 12-month return when the gold silver ratio sits between 90–100 is roughly 20 per cent, so we still see strong gains for silver going ahead, especially if the conditions are right.”
The strength of silver inflows has come amid a wider boom in precious metals. Gold ETFs listed on the ASX have absorbed $660.3 million in net inflows this year to 5 September, more than half of which has gone into Global X’s suite of products.
Meanwhile, global demand for the precious metal has been buoyed by central bank buying and a shift in investor expectations for US monetary policy.
“The US Federal Reserve is turning its focus to the labour market away from inflation,” Lin said. “That shift increases the likelihood of rate cuts, with markets now pricing in up to 100 basis points by year-end.
“Lower interest rates reduce the opportunity cost of holding gold, making it more attractive compared with yielding assets.”
Additionally, escalated attacks on the US Federal Reserve’s independence by US President Donald Trump have place the US dollar under pressure. According to Lin, history has shown that an independent central bank is “more effective at keeping inflation under control, maximising employment and ultimately supporting a stronger local currency”.
“A weaker USD tends to be positive for gold,” he added.
Given these circumstances, Global X has set a year-end silver price target of US$45 per ounce and a gold target of US$4,000/oz.
Lin told InvestorDaily that while silver often lags early in rallies, it could outperform gold if growth stabilises and industrial demand remains strong in a falling-rate environment.
“[The] reason silver has lagged [behind] gold historically is due to the fact that 50 per cent of its demand base is industrial,” Lin said. “Gold usually does better when the economy looks shaky, but silver really takes off once growth starts to recover.”
“So, if we’re at that point in the cycle, silver could be in for a strong run later this year.”
