Why Is Silver’s Mining Margin So Wide? Tavi Costa Explains

Published: 06-25-2026, 11:33 am

Key Takeaways

• According to the Silver Institute’s World Silver Survey 2026, the global average all-in sustaining cost (AISC) for silver mining was $12.21/oz in 2025. At approximately $58 spot today, the industry margin is roughly $46/oz — the widest in recorded silver mining history.

• The US fiscal deficit and trade deficit both structurally point toward a weaker dollar and lower rates over the medium term, per macro strategist Tavi Costa.

• AI infrastructure spending creates a structural demand floor for industrial metals including silver — one that government policy reinforces independently of private-sector capex cycles.

• Physical mines are among the last irreplicable assets in an AI-disrupted economy. Scarcity is not a feature of software.

• The Silver Institute projects a 46.3 million ounce supply deficit in 2026 — the sixth consecutive annual shortfall — which structurally limits any sustained price reversal regardless of short-term paper market moves.

Silver is at $57.83 as of June 25, 2026. A few weeks ago it was touching $70. If you are watching the price, that looks like a significant correction.

If you are watching the math, nothing has changed. The global average all-in sustaining cost to produce an ounce of silver was $12.21 in 2025, according to the Silver Institute. That spread currently stands at roughly $46 per ounce. It is the widest margin in the industry’s recorded history.

The Number Nobody Talks About

Tavi Costa, macro strategist and mining investor, put it plainly in his conversation with GoldSilver’s Maggie Lake above. And it comes down to that same number.

That figure covers the full cost of getting silver out of the ground: labor, energy, equipment, and overhead. According to the Silver Institute’s World Silver Survey 2026, produced by Metals Focus, global average AISC fell to $12.21 per ounce last year. That was its lowest level since 2022. When silver trades at $57.83, the spread between that production cost and that sale price is roughly $46 per ounce.

$46/oz: the approximate spread between silver’s current spot price and the global average all-in mining cost

According to the Silver Institute’s World Silver Survey 2026, AISC averaged $12.21/oz in 2025. At today’s spot price of $57.83, that margin is the widest in the industry’s recorded history. A $12 price correction does not touch it.

“At 66 bucks relative to 15 bucks, who cares?” Costa said in the interview above. “These companies are printing money — and that’s the whole point.” He was speaking when silver traded near $66. Silver is lower now. The Silver Institute’s own data shows actual mining costs averaged $12.21/oz in 2025. The math is only more favorable.

Why Selloffs Feel Bigger Than They Are

Here is the mental trap that catches silver investors during corrections: prices move in absolute dollar terms, so a $12 drop sounds significant. But the relevant question for anyone holding physical silver is not “where was it last month?” It is what structural forces will determine where it goes over the next three to five years.

Costa’s framework answers that directly. The current silver price, even after a correction, represents record profit margins for the miners who produce it. That is not a sentiment indicator. It is arithmetic. And arithmetic does not panic. Those margins are also operating against a backdrop of persistent physical undersupply. The Silver Institute projects the silver market will record a 46.3 million ounce deficit in 2026 — its sixth consecutive annual shortfall.

He is also clear about why the structural macro backdrop for silver remains intact. The United States faces two compounding deficits. The first is a fiscal deficit driven by government spending and high debt-service costs. The second is a trade balance deficit that can only be resolved through a weaker dollar. Both problems point in the same direction. “I would be surprised to see a sustainably strong dollar going forward,” Costa said. “I don’t think that’s going to be the case.”

A weaker dollar over many years is what makes physical silver hold its value. That is not about this week’s moves — it is the multi-year trajectory. That thesis has not changed because of a paper market selloff.

What AI Has to Do With Silver

One of the less-discussed dynamics in Costa’s analysis is the demand floor provided by AI infrastructure buildout. Data centers, electrification, and onshoring of industrial capacity draw heavily on copper and silver alike. These are not optional budget lines that reverse at the first sign of a hawkish Fed statement.

Even if technology companies pulled back on capital expenditure, Costa argues that government would not. “The government sees this as a real threat for the economy,” he said in the interview. “They don’t want to fall behind China.” That pressure from governments places a floor under industrial metals demand. It runs largely outside the normal economic cycle.

Physical mines are among the last asset categories that artificial intelligence cannot disrupt. You can build software overnight. You cannot instruct AI to build a silver mine. San Cristóbal Mining in Bolivia is the world’s fourth-largest silver mine. It is exactly the kind of asset Costa has in mind: “You either have it or you don’t.” That scarcity is structural. It is not going to be disrupted by a large language model.

How to Use This Framework

For individual investors holding physical silver, Costa’s analysis is not a buy or sell signal. It is a framework for separating noise from signal.

The signal: the Silver Institute’s World Silver Survey 2026 puts global average AISC at $12.21 per ounce for 2025. Silver is trading near $58. That roughly $46 spread is wider than at any sustained point in the industry’s recorded history. The producers pulling silver from the ground are generating the strongest cash flows in the sector’s modern era. The Silver Institute also projects a 46.3 million ounce supply deficit in 2026 — the sixth consecutive annual shortfall. That limits the structural downside regardless of what the paper market does on any given week. These are facts about today’s silver market, not predictions.

The noise: any given week’s price movement. The Fed’s latest tone. A hawkish press conference. A paper market selloff driven by computer-triggered margin calls.

When that spread is this wide, short-term corrections do not change the underlying case. They change the entry point. Understanding that distinction is what separates a long-term holder from a short-term speculator. One watches the price. The other watches the math.

Watch the full conversation between Maggie Lake and Tavi Costa here. It covers central bank gold buying, how AI is driving copper demand, and why the two deficits point to a weaker dollar from here.

SOURCES
1. Silver Institute — World Silver Survey 2026
2. Silver Institute — World Silver Survey 2026 Press Release
3. GoldSilver — Live Silver & Gold Prices

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.

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