The silver market is currently seeing its most explosive run in decades. As of early January 2026, the metal has surged nearly 160% since the start of 2025. This week, we saw prices briefly push past the $80/oz milestone, a psychological barrier that has sent the financial press into a frenzy.
But for the everyday investor, is this a breakthrough moment or an overextended bubble? We’ve analysed the latest data and insights from Rick Kanda, Managing Director at The Gold Bullion Company, to break down what’s really moving the needle.
Geopolitical Tensions Spark Safe-Haven Buying
While silver is often viewed through an industrial lens, the current price action is being fueled by raw geopolitical fear. The recent military escalation between the USA and Venezuela has triggered a massive rotation into tangible assets.
“This rise is partly due to the growing tensions between the USA and Venezuela, driven by strong demand from investors seeking these ‘safe-haven’ assets,” says Rick Kanda.
On Wednesday, 7th January, we saw a slight correction below $80/oz, breaking a three-day vertical surge. This serves as a stark reminder that silver is much more volatile than gold, and “geopolitical premiums” can vanish as quickly as they appear.
The Industrial “Squeeze”
Beyond the headlines, a structural deficit is tightening the market. Silver is no longer just a “precious” metal; it is a “critical mineral.”
- The Solar Revolution: China’s recent export restrictions on refined silver have severed a primary artery of global supply.
- The EV Shift: Silver’s conductivity makes it irreplaceable in modern electronics.
- Supply Deficit: Global mining production has failed to keep pace with industrial demand for over five years, creating a “short squeeze” scenario where physical metal is becoming increasingly scarce.
VAT, CGT, and You
If you are looking to “dip your toe” into silver, as Kanda suggests, you must understand the UK tax rules, which can eat into your profits before you even start.
- The 20% VAT Hurdle: Unlike investment gold, which is VAT-exempt, silver bars and coins attract 20% VAT in the UK. This means the price needs to rise by 20% just for you to break even.
- The CGT Loophole: To maximize your returns, look for Royal Mint Silver Britannia coins. Because they are technically UK legal tender, any profit you make is exempt from Capital Gains Tax (CGT). Investing in bars, however, could leave you with a tax bill on your gains once you exceed your annual allowance.
The Bottom Line
Silver is currently the “high-beta” play for those who find gold too slow or too expensive. It offers a lower entry point for smaller investors, but it requires a stomach for volatility.
As Kanda notes: “Silver is a great starting point… however, investors should anticipate price fluctuations and approach with patience.”
In a market where prices are swinging by 5% in a single session, “patience” might be the most valuable asset you can hold.