Dollar’s Retreat: How Softer USD & Lower Treasury Yields Are Repricing Silver

• Macro alignment is driving silver repricing, as real yields have declined from 2.1% to 1.4% since January 2025 and the U.S. Dollar Index has fallen 4.2% year-to-date, lowering the opportunity cost of allocating capital to precious metals.
• Institutional flows confirm a rotation into silver, with silver-backed ETPs surpassing $40 billion in assets under management and recording 95 million ounces of net inflows in H1 2025 - already exceeding the full-year 2024 total - while spot silver has risen 36% year-over-year to over $39 per ounce.
• Producers are monetizing higher silver prices through operating leverage, with Americas Gold and Silver targeting 5 million ounces in annual production and generating 80% of revenue from silver, while strategic offtake agreements unlock value from previously unpaid antimony, copper, and gold credits.
• Cost-advantaged business models are expanding margins, as Cerro de Pasco operates a $1-2/ton tailings reprocessing model with no traditional mining risk, and Vizsla Silver advances toward production with a projected all-in sustaining cost (AISC) of $9.40 per ounce.
• Silver development pipelines are accelerating, exemplified by Vizsla Silver’s January 2025 resource update showing a 43% increase in measured and indicated resources and improved grades, which supports fast-track production by H2 2027, backed by over $200 million in cash and zero debt.

Macro Conditions Driving the Repricing of Silver

A Shift in Yield & Currency Expectations

The structural forces driving silver's repricing extend beyond commodity fundamentals to encompass a broader recalibration of monetary policy expectations and currency dynamics. Real yields across developed markets have declined substantially since January 2025, with the 10-year Treasury Inflation-Protected Securities (TIPS) yield falling from 2.1% to 1.4% as Federal Reserve officials signaled a more accommodative stance amid moderating inflation data.

This dovish pivot has coincided with notable weakness in the US Dollar Index, which has retreated 4.2% year-to-date as global foreign exchange markets respond to concerns over America's fiscal trajectory and debt sustainability. The combination of declining real yields and dollar weakness creates a compelling environment for precious metals, as it reduces the opportunity cost of holding non-yielding assets while simultaneously increasing their appeal as portfolio hedges.

Paul Huet, CEO of America's Gold & Silver, emphasized the timing: 

"I'm very bullish on silver and where it's heading... I don't think it's anywhere close to being done this rally."

Silver, with its dual monetary and industrial characteristics, has proven particularly responsive to these macro shifts, unlike gold, which trades primarily on monetary dynamics. Silver benefits from both safe-haven demand and structural industrial consumption from solar panel manufacturing, electronics, and emerging technologies. This dual demand profile has positioned silver to outperform other precious metals when macro conditions align favorably.

The current environment mirrors conditions from 2010-2011, when similar monetary accommodation and currency debasement concerns drove silver from $18 to over $48 per ounce. While such extreme moves may not repeat, the fundamental drivers -loose monetary policy, fiscal concerns, and geopolitical uncertainty -remain structurally supportive for precious metals allocation.

Market Signals Confirm Investor Repositioning into Silver

ETP Inflows & Price Momentum

The scale and velocity of capital flows into silver-backed exchange-traded products (ETPs) provide compelling evidence of institutional repositioning. Total assets under management in silver ETPs surpassed $40 billion in July 2025, representing a 28% increase from year-end 2024 levels. More significantly, these vehicles recorded net inflows of 95 million ounces during the first half of 2025, exceeding the full-year 2024 total of 87 million ounces.

This institutional demand has coincided with silver's strong price performance, with spot prices rising 36% year-over-year to above $39 per ounce. The sustained nature of these inflows suggests strategic allocation shifts rather than speculative positioning, as pension funds and endowments typically execute large precious metals purchases through ETP structures to maintain liquidity and operational efficiency.

Paul Huet noted:

"About 80% of our metals come directly from silver, so that's quite unique. There aren't too many groups that have 80% of their revenue stream coming from silver... when silver goes up, you can see our stock immediately act."

Institutional Rotation & Asset Allocation Shifts

Evidence of institutional rotation into silver extends beyond ETP flows to encompass direct equity exposure in silver producers and development companies. Hedge fund filings indicate increased positions in silver-focused equities during Q1 2025, while pension fund consultants report growing client interest in precious metals allocation as a hedge against currency debasement risk.

Silver's outperformance relative to other industrial metals further validates this rotation thesis. Year-to-date, silver has gained 36% compared to copper's 14% advance and platinum's 8% decline, reflecting its unique position as both a monetary asset and industrial commodity. This performance differential has attracted momentum-focused institutional strategies that typically avoid traditional commodity exposure.

According to CPM Group's latest precious metals outlook, industrial silver demand is projected to reach 540 million ounces in 2025, a 3.2% increase from 2024 levels, driven primarily by photovoltaic applications and 5G infrastructure deployment. This structural demand provides a fundamental floor for silver prices even as monetary factors drive the current repricing higher.

Repricing Silver Across the Value Chain

America's Gold & Silver:  High Operating Leverage to Silver Prices

America's Gold and Silver Corporation exemplifies how established producers are capitalizing on silver's repricing through operational optimization and strategic asset consolidation. The company's Galena Complex and Cosalá operations in Mexico are targeting annual production of 5 million ounces, positioning USAS among North America's largest primary silver producers.

The recent consolidation of 100% ownership in the Galena Complex represents a strategic inflection point for the company. Management has installed new mining equipment, including a batch plant and long-hole mining methods, while implementing cost reduction initiatives that have lowered all-in sustaining costs to $16.50 per ounce. These operational improvements provide significant leverage to silver price appreciation, with each $1 increase in silver prices contributing approximately $0.12 to earnings per share.

Strategic offtake agreements have unlocked additional value from previously unmonetized byproducts, including antimony, copper, and gold. These agreements provide price protection for base metal production while allowing full exposure to precious metals upside, effectively creating a natural hedge against input cost inflation.

Paul Huet, CEO of America's Gold and Silver, emphasized the strategic rationale behind the Galena consolidation:

"This was one of about five [opportunities]; this one we like the most because it lends itself to our greatest skill sets, which is operational."

Cerro de Pasco: Extracting Value from Above-Ground Silver

Cerro de Pasco Resources represents an innovative approach to silver production through environmental remediation and tailings reprocessing. The company's Quiulacocha project involves re-mining century-old tailings deposits at operating costs of $1-2 per ton - substantially below conventional mining methods that require blasting, drilling, and ore dilution.

This model delivers multiple advantages: elimination of traditional mining risks, positive environmental impact, and recovery of high-value metals including silver, zinc, lead, copper, gallium, and indium. The presence of critical metals like gallium - essential for semiconductor manufacturing -provides additional revenue streams and strategic value given supply chain security concerns.

Initial metallurgical testing confirms silver grades of 2.5-3.2 ounces per ton across the tailings deposits, with preliminary economic analysis indicating all-in costs below $18 per ounce. The company's ESG-positive model aligns with institutional investor mandates while delivering superior economics compared to traditional greenfield development.

Steven Zadka, Executive Chairman of Cerro de Pasco Resources noted:

 "We're not just extracting metals, we're eliminating a century-old environmental problem while recovering high-value silver and gallium at lower risk and cost."

Development Pathways in a Strengthening Silver Price Environment

Vizsla Silver: Advancing Toward Production at Panuco

Vizsla Silver Corporation demonstrates how development-stage companies are leveraging higher silver prices to accelerate project advancement and de-risk production pathways. The company's January 2025 resource update for the Panuco project delivered a 43% increase in measured and indicated resources while improving average grades across all categories.

The Panuco project hosts 240 million ounces of indicated silver equivalent resources at 181 grams per tonne, positioning it among the world's largest undeveloped silver deposits. Management has maintained operational momentum through a test mining program initiated in Q4 2024, which provides cash flow generation while advancing metallurgical understanding ahead of the feasibility study scheduled for H2 2025.

Vizsla's financial position - $200 million in cash with no debt -provides operational flexibility to advance development without dilutive financing. The company's fast-track production timeline targets first production by H2 2027, capitalizing on the current silver price environment while maintaining exploration upside across the 9,386-hectare land package.

Simon Cmrlec, Vizsla Silver Chief Operating Officer noted:

"We're executing on a disciplined path to production while preserving exploration upside. Panuco's scale and grade position us to become the world's largest single-asset silver producer."

Technical Edge & Infrastructure Readiness

The preliminary economic assessment for Panuco demonstrates robust project economics even under conservative silver price assumptions. With projected all-in sustaining costs of $9.40 per ounce, the project generates an 86% internal rate of return and $1.1 billion post-tax net present value at a 5% discount rate, assuming $24 per ounce silver prices.

Mining design incorporates long-hole stoping and drift-and-fill methods optimized for the high-grade vein system, while tailings management and water access strategies align with environmental and social governance requirements. The project's location in Sinaloa provides access to established mining infrastructure and skilled labor, reducing development risk and capital requirements.

Strategic Themes for Capital Allocation in Silver

Silver as a Monetary & Industrial Asset

Silver's investment appeal stems from its unique dual role as both a monetary hedge against currency debasement and an essential industrial commodity. This characteristic distinguishes silver from gold, which trades primarily on monetary factors, and from base metals, which depend solely on industrial demand cycles.

The monetary aspect has gained prominence as central banks globally diversify reserves away from dollar-denominated assets. While central bank silver purchases remain modest compared to gold, the "alternative reserve" narrative has strengthened amid concerns over dollar dominance and fiscal sustainability. Private investors, particularly family offices and high-net-worth individuals, have increased precious metals allocation as a hedge against monetary debasement risk.

Industrial demand provides fundamental support for silver prices independent of monetary factors. Solar panel manufacturing alone consumes approximately 140 million ounces annually, while electronics and 5G infrastructure deployment create additional structural demand. This industrial base provides price support during economic expansions while monetary demand accelerates during periods of financial stress.

Equity vs. Physical Exposure: Risk & Reward

Investors seeking silver exposure face strategic choices between physical holdings, ETPs (Exchange Traded Products), and equity exposure to mining companies. Each approach offers distinct risk-return profiles suited to different investment objectives and portfolio mandates.

Vizsla Silver provides growth and internal rate of return leverage through its development pipeline and exploration upside. America's Gold and Silver offers operating torque to silver prices through established production and cost optimization. Cerro de Pasco represents a cost-insulated ESG-focused approach with critical metals exposure.

A diversified approach across producers, developers, and innovative models optimizes beta exposure to silver price appreciation while providing optionality across different market environments. This strategy recognizes that silver equity performance depends not only on commodity prices but also on execution risk, capital allocation, and operational efficiency.

The Investment Thesis for Silver

• Current market conditions present a compelling case for strategic silver allocation across multiple dimensions. Macro alignment through falling real yields and dollar weakness removes traditional barriers to precious metals appreciation while creating conditions historically associated with silver outperformance.
• Capital flow validation through record ETP inflows and sustained price momentum confirms institutional conviction in silver's repricing. This demand reflects strategic allocation shifts rather than speculative positioning, providing durability to the current trend.
• Operational leverage opportunities exist across the silver value chain, from America's Gold and Silver's cost optimization to Vizsla Silver's development acceleration. These companies demonstrate how higher silver prices translate to improved project economics and accelerated value creation.
• Cost-advantaged models like Cerro de Pasco's tailings reprocessing deliver silver exposure with minimal traditional mining risks while addressing environmental and social governance objectives increasingly important to institutional investors.
• Development upside through well-capitalized projects like Panuco provides equity leverage to silver appreciation while maintaining exploration optionality in proven mining districts.

A Structural Repricing in Real Time

Silver's current performance represents more than cyclical commodity strength - it reflects a structural repricing across the asset spectrum driven by monetary policy shifts, currency dynamics, and institutional portfolio rebalancing. The combination of record ETP inflows, sustained price momentum, and favorable macro conditions suggests this repricing has further to run.

Companies positioned across the silver value chain - from established producers optimizing operations to developers advancing large-scale projects - are strategically aligned with this revaluation. The convergence of monetary accommodation, industrial demand growth, and geopolitical uncertainty creates a multi-year backdrop supportive of silver allocation.

For investors, silver offers both portfolio diversification benefits and exposure to structural themes reshaping global markets. The current repricing reflects not just commodity dynamics but broader shifts in monetary systems, energy infrastructure, and investment portfolio construction that favor real asset allocation over financial engineering.