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Silver prices have soared to an all-time high this week, driven by a surge in industrial demand.
Over the past year, silver has surged over 80%, reaching approximately $61 per ounce, surpassing its previous 1980 peak of $49.50.
This rise has contributed to the FTSE 100’s upward movement this morning, with mining companies like Fresnillo and Hochschild Mining leading the charge.
As more investors turn to silver as a safeguard against inflation, this could mark the beginning of a heightened demand period.
Why has silver hit a record high?
The anticipated interest rate cut by the Federal Reserve today has further stoked immediate interest in silver, though the metal’s appeal has been growing steadily over the past year.
Similar to gold, which has been the focus of investors this year, silver has become a safe haven amid the volatile global economic environment and the effects of U.S. tariffs.
Between 2022 and 2024, silver’s performance was, for the most part, choppy but held between $50-54.
The price of silver has surged to a new record high of near $61 amid renewed investor confidence
Farah Mourad, analyst at IG, says that in 2025 silver ‘has shifted from ‘the forgotten asset’ to one of the most powerful stories in commodities…
‘Silver hasn’t just outperformed gold, it has rewritten the narrative after almost a decade of lagging.’
Stockpiles in China have plummeted, and mining supply hasn’t reacted as quickly.
Most new production isn’t expected before 2027-28, says Mourad, ‘so the tightness we’re seeing today isn’t a spike, it could be the new baseline.’
At the same time, demand has skyrocketed. The shift to net zero means companies need more silver for solar, EVs, semiconductors and AI data centres.
It puts silver in a strong position and what experts call ‘price discovery’ territory.
Mourad says the next technical extensions could be at $72 and $88. When silver last reached this in 2011, the price almost doubled in a few weeks.
Will silver prices keep rising in 2026?
Analysts will be carefully watching the gold/silver ratio, which is how many ounces of silver can be used to purchase an ounce of gold.
A higher ratio generally means silver is undervalued, while a lower ratio indicates that gold might be undervalued.
AJ Bell’s investment director Russ Mould said: ‘The gold-to-silver ratio briefly crossed 100 earlier this year, only the third time it had done so since 1980.
‘That suggested silver was cheap relative to gold (or at least that gold was expensive relative to silver), since the post-1979 average ratio is 66. Silver’s faster gains in the second half of 2025 have brought the ratio down to 78.’
It is currently back down to a year low of around 69. Movements tend to be more dramatic because it is a smaller market and has both industrial and investment demand.
Looking ahead, the outlook for silver is largely positive and will benefit from macro drivers like a softer US dollar, rate cuts and increased interest in safer asset classes.
Mourad says the average of major banks conservatively put silver in the $56-$65 range for 2026, while technical models stretch towards $72 and $88.
‘Historically, silver has outperformed gold during easing cycles, as lower real yields tend to lift both investor allocation and industrial activity,’ say ING analysts.
‘But while it can massively outperform gold in a bull market, it can also fall harder in a downturn. We think silver’s volatility will continue next year.’
Industrial demand accounts for more than half of total silver consumption, so any risk will come from there.
‘Demand for solar is likely to slow from here, particularly in China after a few strong years, with installations expected to peak in 2025,’ say ING.
‘But additional demand tailwinds come from electrification, power grid upgrades, and growing use of silver in automotive components, especially in hybrid and battery electric vehicles.’
They add: ‘A sharper-than-expected global slowdown, particularly in electronics or manufacturing, would slow down silver’s momentum. Higher prices for longer could also lead to demand destruction.’
The pace of gains seen in silver this year is unlikely to be replicated in 2026, but tightened supply, rising demand and a possible breakout put silver in a stronger position.
ING say they don’t think the current trajectory is sustainable but expects prices to ‘remain well-supported amid the combination of resilient industrial demand, constrained supply growth, and a more favourable macro environment.’
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