Silver Breaks $35 - Industrial Demand and Solar Boom Drive Prices

Silver broke through the $35 per ounce level this week, a price not seen since 2012. Unlike gold's primarily monetary driver, silver's rally is being powered by a dual engine: safe-haven demand (following gold higher) and a structural supply deficit driven by booming industrial consumption from the green energy transition.

The Industrial Demand Story

Silver is a critical component in photovoltaic solar cells, each panel using approximately 20 grams of silver. Global solar panel installations are projected at 600 GW in 2026 - a 30% increase from 2025. Additionally, EV battery production and 5G infrastructure are consuming silver at accelerating rates. The Silver Institute forecasts a 165 million ounce supply deficit for 2026, the fourth consecutive year of deficit.

Price Drivers

• Industrial demand: record high in 2026 (720 million oz forecast)
• Mine supply: only growing 2% YoY, unable to meet demand growth
• Investment demand: retail and ETF buying following gold higher
• Gold/Silver ratio: at 95, silver is historically cheap relative to gold

Gold/Silver Ratio Trade

The gold/silver ratio currently stands at approximately 95 (gold price divided by silver price). Historically, this ratio mean-reverts toward 65-75 during commodity bull markets. If gold holds at $3,350 and the ratio contracts to 75, silver would be priced around $44. This structural undervaluation makes silver an attractive long-term hold alongside gold positions.

For trading: immediate resistance at $36, then $40. Support at $33.50. The trend is bullish; buy dips.