Market Overview: Silver Price Reaches Ten-Year High
On July 25, 2026, the spot silver price in London broke through $35 per ounce, reaching a high of $35.28, the highest level since 2016. So far this year, silver has risen 28%, far exceeding gold's 15% gain, making it the star performer in the precious metals market. According to the latest report from the Silver Institute, global silver demand reached 785 million ounces in the first half of 2026, up 12% year-on-year, with industrial demand accounting for over 60% for the first time.
Demand: Dual Drivers of Photovoltaic and 5G
Photovoltaic Industry Silver Consumption Surges 30%
As a key raw material for conductive paste in photovoltaic cells, silver plays an irreplaceable role in the green energy transition. In the first half of 2026, global PV installations reached 280 GW, up 35% year-on-year, driving silver demand for PV to 120 million ounces, accounting for 25% of total industrial demand. China, India, and Southeast Asian countries were the main incremental markets for PV installations, with China adding 120 GW in H1, representing 43% of the global total. As N-type high-efficiency cell technologies (such as TOPCon, HJT) penetrate further, silver consumption per cell increases by 15%-20%, further boosting silver demand.
5G and Electronics Demand Steady Growth
5G base station construction, data center expansion, and consumer electronics recovery have driven silver usage in electronic components (such as capacitors and conductive adhesives). In the first half of 2026, silver consumption in the electronics and electrical sector reached 180 million ounces, up 8% year-on-year. Especially in Southeast Asia, as electronics manufacturing shifts from China, countries like Thailand, Vietnam, and Malaysia have seen significantly higher silver import demand. According to the Federation of Thai Industries, silver procurement by Thailand's electronics industry in Q2 2026 increased 21% year-on-year.
Investment Demand: ETF Holdings Hit Record High
Against the backdrop of inflation expectations and geopolitical uncertainty, investor demand for silver as a safe haven continues to rise. As of July 24, global silver ETF holdings reached 320 million ounces, up 12% from the start of the year. Asian investors were the main buyers, with silver ETF holdings in China, Japan, and India growing 35%, 28%, and 40%, respectively. In addition, speculative net long positions in the silver futures market remained at historically high levels, indicating strong bullish sentiment.
Supply: Mine Output Growth Weak
Global silver mine supply grew only 1.5% in H1 2026 to 430 million ounces. Output in major mining regions such as Mexico, Peru, and China grew slowly due to declining ore grades, worker strikes, and environmental policy restrictions. Meanwhile, recycled silver increased due to higher prices, but only by 3%. The supply-demand gap widened further, with an expected shortage of about 150 million ounces for full-year 2026, the largest in a decade.
Asian Market: Leading Global Silver Trading
Asia has become the core of global silver trading. Trading volume of silver futures contracts on the Shanghai Futures Exchange increased 45% year-on-year, with open interest hitting a record high. Silver futures on the Tokyo Commodity Exchange also attracted significant arbitrage funds. Spot silver trading volume on the Chinese Gold and Silver Exchange Society in Hong Kong doubled from last year, partly due to mainland investors participating via the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs. Singapore, as a precious metals storage and trading hub, saw silver inventories rise 32% in H1 2026, reflecting strong Asian demand for silver.
Price Outlook and Investment Strategy
Analysts are generally bullish on silver's outlook. Goldman Sachs raised its year-end 2026 silver target to $40 per ounce in its latest report, citing accelerating global green energy transition and resilient industrial demand. Citibank noted that silver, as a precious metal with both monetary and industrial attributes, has greater elasticity in a rate-cutting cycle, and advised investors to increase allocations to silver ETFs or related mining stocks. However, short-term technical correction risks should be watched, as the current silver price is near the upper Bollinger Band and the RSI indicator is in overbought territory.
Industry News: Asian Central Banks Increase Silver Reserves
Notably, several Asian central banks have begun including silver in their foreign exchange reserves. In early July 2026, the Bank of Thailand announced the purchase of 200 tonnes of silver as reserve assets, the first large-scale silver acquisition by the country. Earlier, Bank Indonesia secretly purchased 150 tonnes of silver. These moves are interpreted by the market as distrust of the dollar-based credit system and a need for precious metal diversification, further supporting silver prices.
Conclusion
Silver is experiencing a period of structural demand growth driven by PV, 5G, and electronics industries. Supply-side bottlenecks are unlikely to ease in the short term, and supply-demand imbalance will push silver prices higher in the second half of 2026. Investors should closely monitor PV installation data, Federal Reserve interest rate decisions, and Asian demand dynamics to seize long-term investment opportunities in silver.
