Silver prices have been climbing to fresh highs, supported by supply constraints and prospects of U.S. rate cuts. The metal’s momentum is clear. It has gained about 96.03% year to date and 13.6% in November, outperforming gold, which has gained 62.02% year to date.
Per experts, as quoted on CNBC, silver prices reached record highs this year and appear to have room to run amid a tightening supply backdrop. According to Invesco EMEA ETF Fixed Income and commodity product management head, Paul Syms, from a longer-term perspective, structural factors this time around may keep silver prices elevated and could sustain the upward trend, as quoted in the CNBC article.
Additionally, extending portfolios by increasing exposure to a precious metal like silver could also serve as an effective diversification tool. Concentrated rallies in select stocks can expose markets to significant drawdowns, highlighting the need for broader portfolio diversification.
Below, we have highlighted a few reasons that can drive silver up in 2026.
Fed Rate Cuts and a Surging Silver Rally
With silver priced in U.S. dollars, any pullback in the greenback can spur global demand, pushing its price upward as it becomes more affordable for buyers holding other currencies. Per TradingView, the U.S. Dollar Index (DXY) has fallen 0.56% over the past five days and 8.52% year to date. The index has recorded an all-time decline of 17.19%.
The greenback's value tends to move inversely with interest rate adjustments by the Fed. Interest rate cuts by the Fed make the dollar less attractive to foreign investors, as this weakens the U.S. dollar.
Per the CME FedWatch tool, markets are anticipating an 87.6% rate cut in the December meeting, signifying a significant improvement from expectations seen a month ago.
Silver’s Industrial Edge
Often considered an industrial metal, silver plays a critical role in modern technology and clean energy solutions. Silver’s unique properties, like superior conductivity, durability and resistance to corrosion, make it nearly impossible to substitute.
According to the Silver Institute, from medical equipment and almost every computer, mobile phones, automobiles and household appliances, to solar power systems, EV applications and advanced supercomputers used in AI, silver is an indispensable component across multiple industries.
Increasing industrial demand, coupled with limited mined output, fuels the metal’s bullish outlook. Per LSEG data, industrial demand for silver increased to 689.1 million ounces in 2024, up from 644 million in 2023, as quoted on Reuters.
Solar panel usage accounted for 243.7 million ounces, up over 158% from 94.4 million in 2020. According to projections by the International Energy Agency (IEA), 4,000 GW of new solar capacity will be installed between 2024 and 2030, potentially pushing solar-driven silver demand up by nearly 150 million ounces annually by 2030, as per the abovementioned Reuters article.
Per the Silver Institute, silver used in electronics and electrical applications reached a record high last year, growing 4% to 465.6 million ounces.
Silver ETFs to Explore
iShares Silver Trust SLV has gained 18.96% over the past month and 28.20% over the past three months. SLV has added 59.17% year to date and charges an annual fee of 0.50%.
abrdn Physical Silver Shares ETF SIVR has gained 18.98% over the past month and 28.26% over the past three months. SIVR has added 59.39% year to date and charges an annual fee of 0.30%.
Global X Silver Miners ETF SIL has gained 23.29% over the past month and 48.88% over the past three months. SIL has added 124.42% year to date and charges an annual fee of 0.65%.
Amplify Junior Silver Miners ETF SILJ has gained 27.4% over the past month and 56.83% over the past three months. SILJ has added 132.57% year to date and charges an annual fee of 0.69%.
iShares MSCI Global Silver Miners ETF SLVP has gained 25.9% over the past month and 53.28% over the past three months. SLVP has added 136.18% year to date and charges an annual fee of 0.39%.
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iShares Silver Trust (SLV): ETF Research Reports abrdn Physical Silver Shares ETF (SIVR): ETF Research Reports Global X Silver Miners ETF (SIL): ETF Research Reports Amplify Junior Silver Miners ETF (SILJ): ETF Research Reports iShares MSCI Global Silver and Metals Miners ETF (SLVP): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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