Silver Breaks $35: Industrial Demand Becomes New Engine
On July 28, 2026, data from the London Bullion Market Association (LBMA) showed that spot silver price touched $35.12 per ounce intraday, the highest level since December 2025. Unlike gold's recent volatile trend constrained by interest rate expectations, silver's upward momentum comes more from structural changes in the real economy.
"Silver is undergoing a 'demand revolution,'" said Chen Zhiming, analyst at Singapore precious metals research firm BullionStar. "Silver paste consumption in the photovoltaic industry grew 27% year-on-year in the first half of 2026, while silver usage in AI chip packaging surged 45% quarter-on-quarter."
Photovoltaic and AI: Dual Engines of Silver Demand
According to the latest report from the International Energy Agency (IEA), global new photovoltaic installations are expected to exceed 500GW in 2026, a record high. Each solar cell requires about 0.1 gram of silver as electrode material, and this alone drives annual silver demand beyond 5,000 tons. Meanwhile, advanced packaging technologies (such as 2.5D/3D packaging) for AI chips have extremely high requirements for silver's thermal and electrical conductivity, and NVIDIA, AMD, and Intel have all expanded their use of silver solder.
- Photovoltaic silver paste: According to data from the China Photovoltaic Industry Association, domestic silver consumption reached 2,800 tons in H1 2026, up 26% year-on-year;
- AI chip packaging: TrendForce report indicates that silver usage for AI chips will reach 320 tons in 2026, double that of 2025;
- Other industrial areas: 5G base stations, new energy vehicle charging piles, etc. also drive moderate growth in silver demand.
Supply Side "Stretched Thin"
Compared to the explosion in demand, silver supply growth is extremely limited. The Silver Institute's 2026 survey shows that production from the world's top ten silver mines fell by an average of 3.5%, mainly due to declining ore grades and environmental restrictions in major producing regions such as Mexico and Peru. The global silver supply deficit is expected to reach 580 million ounces (approximately 1,800 tons) in 2026, the largest in nearly a decade.
"The supply deficit combined with rigid industrial demand may make silver more resilient than gold," said Li Weilun, head of precious metals derivatives at Singapore Exchange (SGX). "In the past month, open interest in SGX silver futures increased by 15%, with institutional long positions clearly rising."
Gold-Silver Ratio Shows Anomaly
Notably, the gold-to-silver ratio fell to 75.1:1 on July 28, well below the five-year average of 82:1. Historical experience shows that when the industrial cycle expands, the gold-silver ratio tends to decline. Currently, the silver price is still about 28% below its 2020 historical high (around $49), but analysts believe that if photovoltaic and AI demand continues to exceed expectations, the silver price could challenge its historical peak within the next 12 months.
"In the short term, expectations of a Fed rate hike in September may suppress the overall valuation of precious metals, but silver's industrial attributes will provide strong support." Citibank's latest research report raised its 2026 average silver price forecast to $33/oz and noted that "every pullback is a buying opportunity."
Investment Channels and Risk Warnings
For Singapore investors, the following channels are available to participate in the silver market:
- SGX Silver Futures (ticker: SIX) – suitable for professional traders, with ample liquidity;
- Physical silver bars and coins – certified by the Singapore Precious Metals Exchange (SGPMX), with custody available;
- Silver ETFs – such as iShares Silver Trust (SLV) and the locally listed ABF Silver ETF.
Risk warning: Silver price volatility is higher than gold, affected by industrial conditions, monetary policy, and exchange rates. Investors are advised to allocate according to their own risk tolerance and pay attention to the potential impact of the US Q2 GDP data to be released on July 31 on industrial demand.
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