Silver prices have surged more than 70% over the past year, rising in tandem with gold as investors seek safe-haven assets amidst inflationary pressures and geopolitical uncertainty. The metal traded at about $51 per ounce in the London spot market on Friday, easing slightly from an October high of over $54 – its strongest level ever.
While often overshadowed by gold, silver’s dual role as both a precious and industrial metal has placed it at the heart of investor and corporate demand. Its broad use in sectors like electric vehicles, solar panels, electronics, and medical devices has deepened its appeal, particularly as green technologies expand globally.
Analysts attribute the recent price surge primarily to inflows into silver exchange-traded funds (ETFs). “Silver has predominantly been driven by a substantial increase in ETF flows, so that makes it a little vulnerable to further price correction,” said Suki Cooper, head of global commodities research at Standard Chartered.
While prices could fluctuate, Cooper expects silver to regain momentum beyond the first quarter of next year and “test fresh highs into the year end.”
Cooper forecasts an average price of $50 per ounce this quarter, climbing to $57 by late 2026. For investors, ETFs remain popular, alongside buying bars, coins, mining stocks, and jewelry.
Despite the optimistic outlook, challenges loom. The US government recently declared silver a critical mineral, raising the possibility of import tariffs to boost domestic supply. Currently, the US imports about two-thirds of its silver, primarily from Mexico and Canada—countries recently targeted with aluminum tariffs.
The declaration has already roiled the market. Inventories built up throughout the year in anticipation of potential tariffs, but heavy demand from ETFs and buying in India ahead of Diwali triggered temporary shortages in London. The city, home to the world’s biggest silver storage facilities, saw a supply squeeze in early October, briefly pushing prices up.
“Supply was in the wrong place at the wrong time,” explained Bart Melek, global head of commodity strategy at TD Securities. He said the market is already in a 100 million-ounce deficit this year, with a similar shortfall expected in 2026.
Meanwhile, metal from Asia—especially by-products from copper and zinc smelting—has started flowing into India and the London Bullion Market Association (LBMA), easing pressure and driving prices slightly lower.
ETF outflows could pose another headwind. “We have seen quite sizeable redemptions,” said Cooper, noting that retail investors are quick to move in and out of the market. In October alone, ETF holdings fell by 480 tons, although year-to-date flows remained up by more than 3,000 tons.
High prices also risk triggering demand destruction in industries that can substitute or reduce use of silver. But for now, concerns about inflation, fiscal deficits, and a weaker US dollar continue to support the silver rally.
“The chart looks bullish,” said Marc Chandler of Bannockburn Global Forex. “We’ve never been at these levels before, so it’s hard to know how high it can go.”
Long-term, analysts remain optimistic. “We continue to like it,” said Melek.