While silver's role in consumer electronics and renewable energy is well-known, a lesser-discussed aspect of its industrial demand lies within the often-secretive realms of military and aerospace technology.
Recent analysis suggests that military usage of silver may be substantially greater than any other industry category, including electronics, solar panels, and investment demand combined. This information, brought to light by silver market experts, raises significant questions about the transparency of silver demand data and the potential impact on future silver prices.
For years, the silver market has focused on industrial applications such as electronics, solar panels, and medical devices as the primary drivers of demand. However, five U.S. government agencies, including the Department of Defense, Department of Energy, Department of Interior, and the U.S. Geological Survey, have collectively stopped reporting on silver inventories since 1995-1996.
The military’s appetite for silver is well documented and was notable during the Manhattan Project, America’s successful attempt at building the first operational nuclear weapon.
In complete secrecy, the United States removed 430 million ounces of silver from the West Point Bullion Depository to turn 1,000-ounce silver bars into cylindrical billets and wound them onto magnetic coils.
Actions like these, which have come to light in recent years, have led many silver investors to be wary of government-released information on its usage of the white metal.
Military applications of silver, often under-reported or omitted from official data, include:
The hidden military demand for silver could potentially outpace industrial applications as we progress through time and technology advances. Escalating geopolitical tensions and potential conflicts may drive this increase, making silver's role in military applications increasingly significant. This shift could have a substantial impact on the overall silver market, potentially influencing prices and supply dynamics.
The military uses silver for a variety of reasons, including:
It is important to note that the military's demand for silver is classified, and there is limited public information available on the specific applications of silver in military equipment. However, the properties listed above are likely to be among the most important factors driving the military's demand for silver.
While military usage may be underreported, silver's role in various industries is well-documented:
The United States heavily depends on silver imports:
Despite its crucial role in military and industrial applications, silver is conspicuously absent from official critical materials lists published by the U.S. Department of Energy and the U.S. Geological Survey in 2022.
Neither silver nor gold made the cut. This absence has sparked debate, as silver’s strategic importance continues to grow across multiple industries, with demand surging globally.
Shown is a chart revealing the amount of silver reserves held by the U.S. treasury from 1940 through 2020. (Source: CPM Group)
With silver’s critical applications and growing industrial demand, many experts question whether its exclusion might warrant a reassessment.
see also - Why is Silver Missing from U.S. Critical Materials Lists?
The combination of significant military demand and diverse industrial applications could have profound implications for the silver market:
The true strategic importance of silver in military and industrial applications may be far greater than publicly acknowledged, making it a critical resource for national security, technological advancement, and industrial growth.
The interplay between military demand, industrial applications, and investment interest will likely shape the future of the silver market, potentially leading to a significant revaluation of this versatile and indispensable metal.