For more than half a century, central banks have treated gold as the ultimate reserve asset—quietly but consistently accumulating it as a hedge against inflation, currency risk, and geopolitical upheaval. Silver, in contrast, has long been left on the sidelines, considered more of an industrial metal than a monetary one.
That era of neglect may be ending. A shift is underway, and it is one with historic implications: central banks are beginning to turn their attention to silver.
Russia Lit the Spark
The first signal came from Russia. Facing sanctions and dollar isolation, the Russian central bank began experimenting with ways to diversify its reserves beyond traditional gold. Reports emerged that Moscow had quietly increased its strategic silver holdings. The rationale was clear: silver offers many of the same defensive properties as gold, but with the added advantage of industrial demand driven by electrification, solar energy, and advanced technology.
In effect, Russia reminded the world of silver’s dual identity: not just an industrial commodity, but also money.
Saudi Arabia Just Poured Gasoline on It
The real jolt came when Saudi Arabia followed suit. Known for its deep gold reserves and sovereign wealth, the Kingdom has signalled a willingness to diversify into silver as part of its long-term economic strategy. This is not a minor player dipping a toe in the water—Saudi Arabia’s actions carry enormous symbolic weight.
When the world’s largest oil exporter begins treating silver as a monetary reserve alongside gold, it forces other nations to rethink their strategies. The move has sent ripples through the bullion market, sparking fresh demand and rekindling interest in silver as a reserve asset.
Silver Wakes Up as Money Again
Silver has always been money. For thousands of years, it was used in coinage, trade, and wealth storage across civilisations. The Gold Standard may get the headlines, but it was silver that formed the backbone of everyday monetary systems for centuries.
The twentieth century stripped silver of its official monetary role, leaving gold as the lone central bank reserve. But history has a way of circling back. With geopolitical tensions rising, de-dollarisation accelerating, and green energy transforming industrial demand, silver is beginning to look attractive not only to investors, but to central bankers as well.
What This Means for Investors
If central banks are buying silver, the investment thesis is clear: silver is undervalued relative to gold. The gold-to-silver ratio—currently hovering far above historical norms—suggests silver has significant room to appreciate if institutional demand accelerates.
Geopolitics: Nations seeking alternatives to the dollar will look at both gold and silver.
Technology: Silver’s role in solar panels, electric vehicles, and electronics ensures a strong industrial floor for demand.
Monetary History: As central banks wake up to silver’s historic role, it regains legitimacy as money.
After decades of being sidelined, silver is re-emerging as a monetary metal. Russia lit the spark, Saudi Arabia just poured gasoline on it, and other central banks may soon follow. For investors, this is a pivotal moment: silver is no longer just a precious commodity—it is waking up as money again.
At FirstGold, we believe this shift marks the beginning of a new era for silver. Gold may be the king of reserves, but silver is reclaiming its place alongside it.
