Is now a good time to invest in silver?

Silver’s 170% Run Sparks Debate: Boom or Early Warning?

Over the past year, silver has surged from around US$29 to nearly US$79 per ounce, marking one of the strongest runs across major commodities. Demand has continued to build, reinforcing the view that both gold and silver have been standout performers in recent market cycles. That naturally raises a key question for investors. Why is demand accelerating, and how can these periods be approached thoughtfully rather than emotionally?

Looking ahead, expectations for 2026 are far from one sided. Analysts at Heraeus, in their 2026 Precious Metals Outlook, have cautioned that silver and other precious metals could trend lower during the early part of the year. Their view is that prices have moved too far, too fast, driven by momentum rather than fundamentals alone.

While further upside cannot be ruled out in the near term, they expect momentum to cool and a period of consolidation to follow. For investors, this highlights the importance of understanding where demand is coming from and being selective about timing rather than assuming recent gains will repeat indefinitely.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips

Silver’s Shine Comes from Solar, Not Speculators

The first and most important driver behind the surge in silver prices is a persistent supply demand deficit. Multiple industry sources point to a market where annual demand continues to exceed newly mined and recycled supply. The Silver Institute expects this imbalance to persist through 2026, even after silver has already risen around 150%.

On the demand side, silver is increasingly tied to real economic use rather than speculation. Industrial applications now account for more than 50% of global silver consumption, driven by growth in solar photovoltaic installations, electric vehicles, and electronics. As silver becomes more deeply embedded in advanced technologies, demand is less discretionary and more structural. In our view, this shift in the demand mix is a key reason prices have continued to rise, as silver is no longer just a precious metal, but an essential input into future facing industries.

Market nightmares are another catalyst

Supply and demand dynamics are only part of the story. Like gold, silver also plays a role as a store of value and tends to attract capital during periods of macro uncertainty. When market confidence weakens and risk sentiment turns, investors often rotate toward hard assets, and silver benefits from that shift.

A weaker US dollar and renewed inflation concerns have further supported demand, reinforcing silver’s appeal as a hedge against declining purchasing power.

Geopolitical instability has also been an important backdrop. Ongoing tensions in the Middle East, particularly the risk that conflict involving Israel could escalate into a broader regional war, have increased demand for safe haven assets.

At the same time, widespread political uncertainty driven by elections across multiple regions has added to investor caution. While these forces have primarily pushed gold higher, silver has clearly been pulled along, supported by its dual role as both a monetary metal and an industrial commodity.

How can investors take advantage

So how can investors approach this opportunity over the long term. The first point, in our view, is caution. When any asset moves this quickly, the risk of sharp pullbacks rises. Fast gains can reverse just as quickly. That said, if demand does continue to grow and no meaningful new supply enters the market, silver’s structural case remains intact.

For investors looking for a simpler and more disciplined way to gain exposure, ETFs can offer a practical solution. We have already seen products such as Global X Physical Silver ASX ETPMAG rise 15% in a single day, highlighting how sensitive silver exposure can be to price momentum.

Rather than trying to time individual miners or short term price swings, ETF exposure can provide a cleaner way to participate in the long term thematic upside.

For those seeking broader diversification, Global X Physical Precious Metals Basket ASX ETPMPM also offers exposure across multiple precious metals, which can help smooth volatility while maintaining leverage to the same underlying macro drivers.

For investors who like to take on more risk, here are some ASX silver miners.