Can Silver outperform Gold in future due to rise in demand?
Silver surged over 120 per cent in 2025, outperforming gold due to massive demand from solar and EVs. With a 5-year supply deficit, analysts predict silver could reach $100 per ounce by 2026.
Silver’s massive 2025 breakout
Silver has outperformed gold significantly this year, delivering gains of over 120 per cent compared to gold’s 64 per cent. The white metal reached record highs above $66 per ounce as industrial and investor demand converged.
The solar power surge
Solar energy is the single largest driver of silver demand, now accounting for 29 per cent of global consumption. As nations race to meet net-zero targets, solar installations are consuming millions of ounces that mines cannot replace.
Electric vehicles multiply needs
Electric vehicles use nearly double the silver of traditional cars, requiring 25 to 50 grammes per vehicle. By 2027, EVs are expected to overtake petrol cars as the primary source of automotive silver demand.
AI and 5G infrastructure
Silver's unmatched conductivity makes it essential for AI data centres and 5G network hardware. The global rollout of these technologies has created a new, non-negotiable layer of industrial demand for the metal
A persistent supply crisis
The global silver market is currently facing its fifth consecutive year of structural supply deficit. Cumulative shortages since 2021 have now surpassed 800 million ounces, placing immense upward pressure on prices.
Mining production challenges
Silver production is relatively inelastic because 70 per cent of it is mined as a by-product of other metals. This means miners cannot simply increase silver output quickly, even as global demand skyrockets.
Declining global inventories
Silver stockpiles in London and New York have dropped to multi-year lows as industrial users scramble for physical metal. These thin inventories leave the market vulnerable to sharp price spikes during periods of high demand
Industrial demand provides a floor
Over 60 per cent of silver demand is industrial, providing a solid economic foundation that gold lacks. This dual role as both a monetary asset and a critical commodity gives silver unique long-term support.
Price targets for 2026
Analysts at major banks like Citi and UBS have raised their forecasts, with some suggesting silver could reach $75 to $100 per ounce. Its "high-beta" nature means it typically moves faster and further than gold in bull markets.
Choosing between gold and silver
While gold offers stability, silver currently offers higher growth potential due to its supply-demand imbalance. It remains a preferred choice for investors with a higher risk tolerance seeking to capitalise on the green energy transition.
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