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By: Fawad Razaqzada, Market Analyst
When writing this article just before Christmas, I was wondering what the year ahead would holds for gold and silver. My soon-to-be-published gold 2026 outlook suggests I am not feeling super bullish on the yellow metal after its staggering almost 70% gains this year. Silver has had an even better 2025, exploding higher by nearly 150% — putting both metals on course for their strongest annual showing since 1979. The move for gold hasn’t come out of nowhere, but with silver it has been a remarkable rally after years of pain for silver bulls. The white metal’s rally has been turbocharged by speculative inflows and ongoing supply disruptions across key trading hubs, lingering fallout from October’s historic short squeeze. But will that momentum carry into 2026, and will we see even more records broken?
At the macro level, the backdrop couldn’t be more supportive. The US Federal Reserve is widely expected to deliver more rate cuts in 2026 after and that’s historically a green light for precious metals. Lower rates reduce the appeal of cash and short-term bonds, weaken the US dollar, and push investors towards hard assets perceived as stores of value. Gold was the first beneficiary, but silver quickly followed — and then accelerated.
Central banks have been steady buyers, while ETF inflows have quietly done a lot of the heavy lifting – especially for gold. Gold-backed ETF holdings have increased in every month this year bar May, underlining just how persistent demand has been. Politics has also played its part. President Donald Trump’s aggressive push to rewire global trade, alongside repeated jabs at the Federal Reserve’s independence, poured extra fuel on the rally earlier in the year. At the same time, investors have evidently been stepping away from sovereign bonds and fiat currencies amid growing concerns that rising debt levels will steadily erode their real value. This has been my long-standing argument for being bullish on gold and silver.
There’s also a clear spillover effect at play. Gold’s rally pushed prices above $4,500 an ounce, forcing some investors to look for cheaper alternatives. Silver, with its tighter market and higher volatility, naturally became the next target. Once momentum kicked in, price action did the rest.
But unlike gold, silver isn’t just a financial hedge — it’s an industrial workhorse. Demand from the technology sector has exploded, particularly from electric vehicles, solar panels, advanced batteries, and electronics. Silver is the best electrical conductor available, and for many applications, there’s simply no easy substitute. As EV adoption rises and renewable energy investment continues, silver demand isn’t cyclical — it’s structural.
That’s where the real problem emerges: supply. Silver production has struggled to keep pace for years. Most silver is mined as a by-product of other metals like copper, lead, and gold, which means output can’t be ramped up quickly even when prices surge. Declining ore grades, environmental restrictions, and limited new projects in major producing countries such as Mexico, Peru, and China have only tightened the squeeze. Global demand has now outpaced mine supply for five consecutive years.
Add geopolitics to the mix, and the pressure intensifies. Fears that the US could impose tariffs on silver — especially after it was added to the US Geological Survey’s list of critical minerals — triggered aggressive stockpiling. Large volumes of silver flowed into Comex-linked vaults in New York, draining inventories in London, the world’s main spot trading hub. At the same time, silver-backed ETFs absorbed over 100 million ounces, further reducing available supply.
The result was a market that simply seized up. Borrowing costs for silver spiked to record levels, liquidity evaporated, and prices surged as buyers scrambled for physical metal. Unlike gold, silver has no central-bank backstop — there’s no lender of last resort when inventories run thin. That makes price moves sharper, faster, and far more explosive.
Silver has also benefited from broader concerns around debt, currency debasement, and political uncertainty. Heavy debt loads in the US, Europe, and Japan — combined with a lack of appetite to fix them — have pushed investors toward alternative assets. Silver, cheaper and more accessible than gold, has become a natural beneficiary of this trend.
Silver has quietly gone from being gold’s cheaper cousin to the star of the precious metals complex in 2025 — and the move hasn’t been subtle. Prices have surged to record highs above $70 an ounce and comfortably outperforming gold. While gold’s rally laid the groundwork, silver’s breakout has been driven by a perfect storm of macro, market structure, and real-world supply constraints.
Looking ahead, the fundamentals remain stretched. Industrial demand shows no sign of slowing, inventories are near historic lows, and supply constraints are structural rather than temporary. As long as rates are falling, the dollar remains under pressure, and geopolitical risks stay elevated, silver prices are likely to remain elevated — and volatile.
But that doesn’t mean prices will continue to rise at the same pace as in 2025. In fact, there is an increased risk we could see a sharp reversal soon.
Silver heads into 2026 after an exceptional run. However, after such a powerful rally, the outlook is no longer one-sided. While the longer-term bullish case remains intact, the macro backdrop looks more finely balanced, with much of the easing cycle already priced in, bond yields still elevated and geopolitical risks showing tentative signs of stabilisation. While supply remained tight, this could ease in 2026, potential resulting in a correction. As a result, 2026 is shaping up as a year of two-way price action rather than a repeat of 2025’s explosive gains. Still, we would favour looking for bullish opportunities on the back of any sizeable corrections in 2026.
A key uncertainty for the year ahead is how gold will play out given the two metals’ close relationship. The yellow metal has been propped up by central bank demand, particularly from China. Although buying has remained solid, the pace has slowed at higher price levels, and there are signs that some central banks have already started trimming reserves. If Chinese demand cools further for gold, the market could be vulnerable to profit-taking, and this could spillover into silver especially given how stretched positioning has become.
At the same time, expectations for further rate cuts have faded, with several major central banks signalling a pause or even a tilt back towards tighter policy, making it harder for precious metals to push significantly higher without fresh catalysts in 2026.
From a technical perspective, the trend remains constructive, but risks are rising. Silver was holding comfortably above key support levels, at the time of writing. As long as higher highs and higher lows remain intact, aggressive bearish bets are hard to justify. That said, with momentum stretched - the RSI on all major time frames is flashing big warning signs (not that this mattered for gold in 2025), the correction potential is growing.
There are now lots of support levels to watch on any short or long-term correction. Key levels include those big round handles such as $60 and $70. But the most important one to watch, should prices pullback that far, is around $50, which ties in with the long-term breakout zone and close to where prices had peaked in the 1980s and in 2011. An additional level to watch for a possible bounce is around $54.50, roughly corresponding with the October 2025 high.
On the upside, there are no prior reference points to watch, making it difficult to identify any potential resistance levels. So, it is best to let price action tell us where resistance lies.
In short, silver may stay elevated in 2026, but extending the rally sharply will likely require either renewed supply stress or a clear dovish shift from central banks. We would favour a correction to arise and then look for dips to be bought.
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