Why are the U.S., China, India, Saudi Arabia, and others buying so much gold

Why are the U.S., China, India, Saudi Arabia, and others buying so much gold (and in some cases silver)?

✅ Most logical and widely discussed reasons

1. Hedge Against a Declining or Uncertain Dollar System

Many countries—especially China, Russia, Middle Eastern economies—are reducing dependence on the U.S. dollar.
Gold is viewed as a neutral reserve asset that does not depend on another country's government or monetary policy.

Why this matters:

• Sanctions against Russia highlighted vulnerability of holding reserves in dollars.
• Countries want a backup reserve system in case of geopolitical shocks.

2. Protection From Inflation and Monetary Expansion

During the past decade—and especially after COVID—countries have watched:

• huge levels of money printing from major central banks
• long-term inflation pressure
• rising sovereign debt levels (U.S. debt over $34T)

Gold behaves as:

• an inflation hedge
• a long-term store of value
• a protection against currency devaluation

3. Diversifying Away from U.S. Treasuries

Central banks traditionally held Treasuries as primary reserves. Now:

• U.S. interest payments are very high
• questions are rising about long-term U.S. fiscal sustainability
• foreign holdings of U.S. Treasuries have been declining for years

Gold provides diversification without counterparty risk.

4. Preparation for a Shifting Global Financial Order

Many analysts believe we’re in the early stages of:

• a multipolar monetary system
• reduced dominance of the U.S. dollar
• the possible emergence of a BRICS commodity-linked settlement system

Gold serves as a universal, settlement-ready reserve in such a transition.

5. China’s Strategic Goal: Yuan Internationalization

China has been the largest gold buyer. Reasons include:

• supporting the yuan’s global credibility
• backing future trade settlement systems
• reducing reliance on dollar-based reserves

Gold accumulation strengthens China’s financial independence.

6. Middle Eastern Countries Hedging Oil Revenues

Saudi Arabia and others (UAE, Qatar) are:

• preparing for a post-oil economic era
• diversifying sovereign wealth
• reducing exposure to petrodollar volatility

Gold is the ideal “sovereign insurance policy.”

7.

United States status

Countries

Best Silver Investment Demand, Supply, and Strategic Drivers

From the desk of Michael Mick Webster

Major countries are building gold and silver reserves to protect themselves from geopolitical risk, inflation, debt instability, and a potential shift away from a U.S.-dominated financial system.

Silver is more complicated than gold because it is a precious metal, but it's also deeply industrial. Here's what the data shows and why some countries may see silver as strategic.

1. Record Industrial Demand
• According to the Silver Institute’s 2025 survey, silver industrial demand in 2024 was 680.5 million ounces (Moz) — a record. The Silver Institute+1
• Major growth areas: green energy (solar PV), EVs, grid infrastructure, and demand from AI-related electronics. The Silver Institute
• In fact, the silver deficit is structural: demand has outpaced supply for several years. Money Metals Exchange
2. Supply Constraints
• Silver mine production is growing very slowly: ~0.9% growth in 2024. The Silver Institute+1
• Much of silver comes as a by-product of other mining (e.g., lead, zinc), which limits how fast supply can ramp up. AInvest
• A big factor: refining capacity is constrained. Some commentators point to a bottleneck in how much refined (deliverable) silver is available. Reddit
3. Deficit & Market Imbalance
• The 2024 reported physical market deficit was ~ 148.9 Moz. The Silver Institute+1
• Over the 2021–2024 period, the cumulative deficit was ~678 Moz — huge in silver-market terms. The Silver Institute
4. Strategic Importance of Silver
• Silver's role in solar PV is especially critical. Some advanced PV technologies use more silver per panel. Gov Capital
• Its use in EVs, electrical infrastructure, and electronics makes it not just a “store of value” — but a critical industrial metal.
• Because of this dual role (precious + industrial), silver could be seen as a strategic metal: countries that build up physical silver could be hedging not just monetary risk, but resource risk.
5. Forecasts / Risks
• Some analyses suggest that even if supply grows modestly, demand could remain strong enough to maintain a deficit. MINING.COM
• There’s also a risk/reward for institutional players: long silver could be a bet on both continued industrial demand and a monetary demand shift (if nations start treating silver more like “strategic insurance”).

Silver Price Outcome:

• 2026: $100–$200
• 2027: $200–$350
• 2028: $350–$500+

This is the modest “silver revaluation” scenario often discussed among commodity analysts.

Putting It All Together: What This Means Strategically

• Not just gold anymore: While gold remains the “classic” reserve asset, silver is increasingly being treated as a dual-purpose metal: industrial + strategic reserve.
• Long-term hedging: Countries that are buying heavily are likely not just speculating — they may be positioning for a world where reserve assets are less about fiat currencies and more about real, physical, multipurpose commodities.
• Supply risk is real: With silver’s structural deficit and slow-supply growth, future demand (especially from tech + green energy) could squeeze physical supplies — making silver more than just a “nice-to-have” reserve.
• Geopolitical leverage: Having physical silver could become a lever in future economic or geopolitical competition, especially for countries that don’t want to rely purely on gold or currency reserves.
• Price implications: If strategic accumulation continues (or accelerates), it could support higher silver prices long-term, especially given industrial demand tailwinds.

Drivers:

• Several nations formally classify silver as a “strategic reserve metal”
• Accelerated solar expansion creates chronic shortages
• Mining supply fails to materialize (75% of silver is a byproduct—can't ramp supply easily)
• Retail and institutional hoarding spike
• Gold/silver ratio collapses toward 30:1 or lower

Silver Price Outcome likely 

• 2026: $100–$200
• 2027: $200–$350
• 2028: $350–$500+

Silver: Industrial Demand + Monetary Hedge

Silver is more industrial than gold:

• essential for solar, batteries, electronics, EVs
• global supply is tightening
• production has not kept up with demand

For countries betting on:

• renewable energy
• electrification
• strategic metals

…silver is the only precious metal that serves both economic and monetarypurposes.

Silver’s Strategic Moment:

Below is a professional, deeply researched news-style white paper on why silver is positioned for strong value now and in the future — especially relative to the U.S. dollar’s weakening trend and growing industrial demand. It ties together up-to-date market dynamics, supply-demand fundamentals, industrial uses, structural constraints, and institutional positioning such as JPMorgan’s role in the market.

Silver’s Strategic Moment:

By Investigative Reporter Michael Mick Webster

 Industrial Demand, Supply Constraints, and a Changing Monetary Landscape

Executive Summary

Silver — historically known as a precious metal and monetary asset — is increasingly transitioning into a critical industrial metal driving multiple global megatrends. Today’s market reflects an unprecedented structural deficit, a surge in industrial demand tied to renewable energy, electric vehicles (EVs), electronics, and advanced technologies, and broader macroeconomic shifts such as a weakening U.S. dollar. These factors collectively contribute to a case where silver’s value is not only rooted in traditional stores of wealth but also in robust, long-term real-world demand, suggesting potential price appreciation beyond historical norms.

1. Industrial Demand: Silver’s New Economic Role

A 21st-Century Industrial Catalyst

Silver is no longer primarily a monetary or jewelry metal — industrial demand now accounts for the majority of global consumption, driven by:

• Solar Photovoltaics (PV) — Silver paste is indispensable for conductive pathways in solar cells. Demand from the solar sector is expanding rapidly as global renewable energy capacity grows. Analysts report that solar demand alone could consume up to ~30% or more of annual silver supply by the end of the decade. Baker Steel Capital+1
• Electric Vehicles & Power Electronics — Advanced EVs and power control systems use silver in battery management, contacts, connectors, and charging systems. EV electrification is linked to a meaningful rise in metal intensity per vehicle. Wedbush Investor
• Electronics & AI Infrastructure — Silver’s unmatched electrical and thermal conductivity makes it critical in semiconductors, 5G infrastructure, and AI data centers, sectors predicted for continued growth. Wedbush Investor+1
• Samsung Tesla and other electric car manufacturers are turning to batteries that uses silver so they last longer and or safer. Lithium is being replaced.

Demand Growth Outpacing Supply

Total global silver demand hit record levels in recent years, with industrial consumption exceeding 700 million ounces annually — more than half of total demand. CME Group Meanwhile, mines are producing only modest increases in output, resulting in persistent annual deficits where consumption continuously outstrips production. Wedbush Investor

2. Supply Deficits and Development Challenges

Persistent Structural Deficit

For multiple consecutive years, silver demand has outpaced supply, creating a structural deficit. Estimates suggest cumulative deficits could total hundreds of millions of ounces, effectively draining above-ground stocks and tightening physical availability.

New Mines Take Years to Develop

Silver mine projects face long lead times due to exploration, permitting, financing, and construction. Studies show that development from discovery to production typically takes 7–10+ years, often longer in politically complex or environmentally sensitive jurisdictions. This lag creates a rigid supply response that cannot quickly adapt to accelerating demand, reinforcing the likelihood of prolonged market tightness.

Compounding this issue, silver is primarily produced as a byproduct of copper, lead, zinc, and gold mining. As a result, silver supply is less responsive to silver prices themselves; even sharply higher prices do not immediately incentivize significant new standalone silver production. This structural characteristic further constrains supply elasticity and amplifies upside price pressure during periods of demand expansion.

1. Monetary Dynamics and the Weakening U.S. Dollar
   Silver as a Dual-Purpose Asset
   Silver occupies a unique position among commodities: it functions simultaneously as an industrial input and a monetary metal. In environments of monetary debasement, rising fiscal deficits, and declining confidence in fiat currencies, silver historically benefits alongside gold — but with greater volatility and, often, greater upside leverage.

The U.S. dollar faces long-term structural headwinds driven by:

• Expanding federal debt and persistent budget deficits
• Higher-for-longer interest rates stressing fiscal sustainability
• Increasing use of alternative currencies and bilateral trade settlement mechanisms globally

As the dollar weakens in real terms, hard assets priced in dollars — particularly scarce metals like silver — tend to reprice higher. Unlike gold, silver’s lower market capitalization allows capital inflows to have an outsized impact on price movements.

Inflation Protection and Real Asset Repricing
Even in periods where headline inflation moderates, structural inflation driven by energy transition costs, reshoring of manufacturing, and geopolitical fragmentation supports the case for real assets. Silver, unlike many commodities, benefits both from inflation hedging demand and from direct consumption growth.

1. Institutional Positioning and Market Structure
   The Role of JPMorgan and Physical Silver Holdings
   One of the most underappreciated aspects of the silver market is the concentration of physical inventory. JPMorgan is widely understood to be one of the largest holders of physical silver globally, with estimates often exceeding 600 million ounces held directly or indirectly through vaulting and exchange mechanisms.

While futures markets can influence short-term pricing, physical silver ultimately settles supply constraints. As industrial users increasingly require guaranteed delivery, the value of actual vaulted metal — not paper contracts — rises. Tightness in the physical market increases the risk of price dislocations between spot, futures, and wholesale industrial procurement.

Paper vs. Physical Dynamics
Silver’s paper market (futures, options, ETFs) is many multiples larger than the available physical supply. This imbalance has historically suppressed prices, but it also creates latent instability. In periods of sustained physical demand, paper claims may be forced to converge with real-world availability — often rapidly and violently.

1. Relative Valuation: Silver vs. Gold
   The Gold-to-Silver Ratio Signal
   The gold-to-silver ratio has remained historically elevated relative to long-term averages. While gold often leads during early phases of monetary stress, silver has traditionally outperformed during later stages when inflation expectations rise and industrial demand strengthens.

A normalization of this ratio — even partially — would imply silver prices rising at a significantly faster rate than gold, independent of gold’s absolute performance.

Undervalued on a Real Basis
When adjusted for inflation and compared to prior industrial cycles, silver remains substantially below historical highs. Yet today’s demand base is structurally stronger and more diversified than at any point in modern history, suggesting that past valuation benchmarks may understate silver’s future equilibrium price.

1. Forward Outlook: A Converging Set of Tailwinds
   Silver’s outlook is defined by convergence rather than speculation:

• Industrial demand is non-optional and growing
• Supply growth is constrained, slow, and largely unresponsive
• Monetary conditions favor hard assets
• Institutional inventories are concentrated
• Physical availability is tightening

These forces do not depend on a single catalyst. Instead, they represent a durable shift in silver’s role within the global economy — from a cyclical precious metal to a strategic industrial and monetary asset.

Silver stands at the intersection of energy transformation, technological advancement, and monetary realignment. Unlike purely financial assets, silver’s value is grounded in physical necessity. Unlike purely industrial metals, it carries monetary and store-of-value characteristics that gain importance as confidence in fiat systems erodes.

In an environment defined by structural deficits, rising real-world demand, and macroeconomic uncertainty, silver appears positioned not merely for cyclical appreciation, but for a sustained repricing reflective of its evolving strategic importance.

Investigative Reporting & Opinion Pieces

Michael Mick Webster

As an investigative reporter, I strive to provide in-depth, honest, and thorough coverage of a wide range of topics, with a particular focus on financial matters, policy, and the issues that shape our daily lives. My work is grounded in meticulous research, critical analysis, and a commitment to shedding light on the complex stories that impact individuals and communities.

However, it is important for my readers to understand that while I cover financial issues in detail, I am not a licensed financial advisor, lawyer, accountant, or subject to any specific regulatory requirements. My articles are designed to inform, challenge, and spark conversation, but any advice or information offered should not be construed as professional guidance.

In addition to reporting the facts, I also offer my personal perspective and analysis on various subjects. My opinion pieces are exactly that—opinions. They are intended to provoke thought, encourage dialogue, and explore different angles on the issues at hand. These views are my own, based on the information available, and should not be seen as definitive advice or counsel in any field.

I am committed to transparency and responsible journalism, and I encourage my readers to do their own research and seek out professional advice where necessary. My goal is to provide the context and clarity that allow you to make informed decisions on matters that affect your life. Thx Mick