On July 25, 2026, the global precious metals market witnessed a landmark moment: the LBMA silver fix price broke through $48 per ounce, hitting an intraday high of $48.75, with year-to-date gains exceeding 45%. Meanwhile, gold prices hovered around $2,850 per ounce, and the gold-silver ratio (gold price/silver price) broke below the 60 threshold for the first time, bottoming out at 58.3, a record low since data tracking began.
1. Explosive Growth in Silver Industrial Demand
Silver's role as an industrial metal is being repriced by the market. According to the latest "2026 Global Silver Supply and Demand Report" by the World Silver Survey, global silver industrial demand grew 18% year-on-year in the first half of 2026, reaching 620 million ounces, a record high for the period. Among this, silver usage in the photovoltaic sector surged 32% year-on-year, with its share of total industrial demand rising from 12% in 2020 to 22%; silver usage in electric vehicles and charging stations grew 27%; and demand for silver in 5G communication base stations and AI chip packaging also saw double-digit growth.
Industry analysts point out that the rapid iteration of solar cell technology from PERC to TOPCon and HJT (heterojunction) is the core driver behind the surge in silver demand. Each TOPCon cell uses about 30% more silver paste than traditional PERC cells, while HJT cells use nearly twice as much silver. In the first half of 2026, global newly installed photovoltaic capacity exceeded 180GW, with China contributing over 70GW, directly driving silver industrial consumption beyond 110 million ounces.
2. Persistent Supply Tightness
In stark contrast to robust demand, the silver supply side faces multiple bottlenecks. Mexico's Saucito mine, the world's largest silver-producing country, and Peru's Antamina mine saw output declines of 12% and 8% respectively in the first half of the year due to worker strikes and declining ore grades. China, the world's second-largest silver producer, also saw silver mine output fall 3% year-on-year due to stricter environmental policies and resource depletion. Global silver mine supply totaled 580 million ounces in the first half of 2026, down 2% from the same period last year.
The supply-demand gap continues to widen. The World Silver Survey projects a global silver market deficit of 150 million ounces for full-year 2026, marking the fifth consecutive year of supply shortfall and the largest deficit in nearly a decade. In terms of inventories, LBMA silver stocks fell from 1.25 billion ounces at the start of the year to 1.12 billion ounces by the end of July, a decline of more than 10%.
3. Historic Breakthrough in Gold-Silver Ratio
The gold-silver ratio measures how many ounces of silver one ounce of gold can purchase. Historically, it has fluctuated in the 60-80 range, and under extreme conditions has exceeded 100 (e.g., early 2020 during the COVID-19 outbreak). At the start of this year, the ratio was still hovering around 62, but the subsequent acceleration in silver prices pushed the ratio steadily lower. On July 25, gold fell slightly by 0.3% to $2,840 per ounce, while silver rallied strongly by 2.1% to $48.7 per ounce, driving the ratio below the psychological 60 mark.
"The gold-silver ratio falling below 60 means silver's industrial attributes have outweighed its financial attributes," wrote Morgan Stanley's commodity strategist in a recent report. "With silver's inventory-to-consumption ratio at historical lows and the photovoltaic industry accelerating, silver may be undergoing a structural revaluation."
4. Investment and Strategy
Silver's strong performance has attracted substantial capital inflows. The world's largest silver ETF, iShares Silver Trust (SLV), has seen net inflows exceeding $2 billion since July, with holdings rising to 18,000 metric tons, a record high. Meanwhile, silver futures open interest on the Shanghai Futures Exchange climbed to 2 million lots, with speculative net long positioning reaching 35%.
Industry insiders remind investors to be wary of short-term volatility risks. "Silver has already risen sharply this year, and a pullback may occur in the short term due to profit-taking," said a senior analyst at Seabank Asia Financial. "But in the medium to long term, silver demand growth driven by green energy transition and electronics industry prosperity is certain, and the gold-silver ratio still has room to fall. Investors are advised to watch for opportunities to accumulate silver mining stocks and silver ETFs on dips."
5. Outlook for H2 2026
Looking ahead to the second half of 2026, the market widely expects the Federal Reserve to hold rates steady or even begin cutting, which would further depress the US dollar index and provide macro support for precious metals. Combined with the continued trend of global central bank gold accumulation (global central bank net gold purchases reached 450 tons in H1 2026), gold prices may remain elevated in range-bound trading, while silver is expected to outperform gold on the back of industrial demand.
The World Silver Survey forecasts that the average silver price for full-year 2026 will reach $45 per ounce, potentially touching $55 in an optimistic scenario. The gold-silver ratio may further decline to below 55. Investors should closely monitor China's photovoltaic installation data for September and changes in US solar industry policy.
Risk warning: factors such as a sharper-than-expected slowdown in global economic growth, solar subsidy cuts, and recovery of silver mine capacity could lead to significant silver price volatility. The information provided in this article is for reference only and does not constitute investment advice.
