Silver prices have delivered mouth-watering returns this year on strong industrial demand, tight supply, robust inflows in exchange-traded funds (ETFs), US Federal Reserve rate cuts and the expectations of further rate reduction.
International silver prices have surged 158% year-to-date. On the other hand, domestic spot silver prices have soared by nearly ₹1,45,000 per kg, or almost 170% this year so far.
Strong industrial demand, especially from the sunrise sectors, such as electric vehicles (EV), solar, semiconductors, and data centres, amid tight supply, is the key driver for silver prices. In 2024, global silver demand exceeded the metal’s supply for the fourth consecutive year, resulting in a structural market deficit of 148.9 million ounces, data from the Silver Institute showed.
An overall 0.75 percentage point rate cut by the US Federal Reserve and expectations of at least two rate cuts next year are also key drivers for silver prices.
To some extent, there is also a FOMO (fear of missing out) factor among investors as gold prices have surged 72% this year so far, making it highly expensive for investors. Some experts say instead of gold, many investors are flocking to silver, anticipating the continuation of robust industrial demand.
On 26 December, silver futures rose to the level of $79.70 per troy ounce. Experts believe the precious metal may hit the $100 mark in 2026.
Silver eyes $100 mark
According to experts, silver is well-poised to touch the $100 mark in the coming year.
“Silver has delivered an exceptional performance in 2025, returning to the forefront of global investor attention. As markets look ahead to 2026, the long-discussed $100 per ounce level is no longer viewed as a purely speculative projection,” said Ravinder Sharma, Senior Commodity Research Analyst at SMC Global Securities.
“The prevailing consensus for 2026 currently places silver in the range of $70 to $85 per ounce. However, silver’s high-beta characteristics mean that once major resistance levels are breached, price movements tend to accelerate more rapidly than those of gold,” said Sharma.
Experts highlight the following five key factors that can drive silver prices to the coveted milestone:
1. The supply-deficit
There is this basic demand-supply rule behind the stellar gains in silver prices.
“Silver has been in a multi-year supply deficit — global mine output has lagged demand, and above-ground inventories are declining. Structural tightness on the physical market could support much higher prices if deficits deepen,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Aksha Kamboj, Vice President for India Bullion and Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures, also pointed out that the demand for silver has led to supply deficits and a lack of adequate inventories due to mine production not aligning with demand and industrial demand from solar panels, EV cars, semiconductors, and energy investments.
Sharma pointed out that the silver market is entering its fifth consecutive year in which global demand exceeds mine supply.
“Physical inventories across major trading hubs such as London and the COMEX have declined meaningfully, and expectations that China may curb silver exports from early 2026 could further tighten global availability. Industrial demand remains another powerful driver,” said Sharma.
2. Strong industrial demand
Many factors that drive gold prices also move silver. But silver has an additional driver- industrial demand. The metal is a crucial element for many emerging industries.
“Silver is crucial in solar panels, electric vehicles (EVs), 5G/AI electronics, and other clean-tech infrastructure. As these sectors grow, industrial demand may outpace supply, further tightening markets. Other catalysts are a weak dollar and rising safe-haven demand to push Comex Silver to $100/oz in 2026,” said Trivedi.
“The role of silver is not only as a hedge tool in an unstable economic scenario but also a key industrial metal in today’s energy transformation landscape, which cannot be undermined. If such factors continue, the price may very well touch the triple digits in 2026,” said Kamboj.
3. Increased safe-haven demand
A confluence of factors, such as weakness in the US dollar and geopolitical tensions, has created a favourable environment for silver prices.
“The projections of interest cuts from the US and a weakening dollar index, combined with an increase in geopolitics, are pushing safe-haven investments and speculation,” said Kamboj.
4. The narrowing gold-silver ratio
The current gold-silver ratio stands near 60, which indicates strong outperformance of silver prices. The gold-silver ratio measures how many units of silver are needed to buy one unit of gold. So, to buy one gram of gold, one needs 60 grams of silver at present. Historically, the ratio hovers around 90.
“If the gold-silver ratio, which has already compressed significantly in 2025, continues to move toward historical super-cycle levels of 30:1 to 40:1, a move toward $100 becomes mathematically plausible,” said Sharma.
“Historically, silver tends to outperform gold during the later stages of a precious metals bull cycle, and with gold trading near record highs, any further normalisation of the gold-silver ratio could drive a sharp repricing,” said Sharma.
5. Further monetary easing
Further rate cuts by the US Federal Reserve next year can support the bull run in precious metal prices.
Sharma underscored that the expectations of easier monetary policy in 2026, alongside ongoing de-dollarisation trends, reduce the opportunity cost of holding silver and provide a supportive macroeconomic backdrop.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
