Since the start of the year, the price of silver has surged by more than 65% at its peak, with multiple countries reinforcing its strategic resource attributes through policy measures. Driven by both the resurgence of its financial properties and the expansion of industrial demand, silver is undergoing a significant value re-rating, making its future trajectory a focal point of market attention.
The precious metals market kicked off 2026 with a dramatic roller-coaster ride. Spot gold, starting from approximately $4,320 per ounce, successively broke through several key resistance levels, reaching a peak of $5,598 per ounce. Its cumulative increase reached as high as 29%.
After surpassing $80 per ounce in early January, the spot silver price began a strong upward trend, breaking through the $100 and $110 per ounce key levels within just one month. On January 27th, silver experienced a sharp intraday surge, climbing 14% to a high of $117 per ounce before rapidly retreating to close at $103 per ounce; subsequently, the price gradually recovered from this pullback, briefly breaking through $120 per ounce on January 29th.
Thereafter, both gold and silver entered a period of volatility. In the early hours of January 31st, spot gold saw its intraday decline widen to a maximum of 12%, dropping to a low of $4,682 per ounce, marking its most severe single-day drop in over 40 years. Concurrently, spot silver recorded its largest-ever intraday decline, plummeting over 36% at one point to a low of $74.28 per ounce. As of 17:55 on January 31st, spot gold was quoted at $4,883.45 per ounce, down over 9% on the day, while spot silver was quoted at $85.012 per ounce, down over 26% for the day.
Focusing specifically on the silver market, the unfolding of its recent price action has been even more breathtaking. From the start of 2026 to date, spot silver has surged over 65% at its peak. Extending the timeframe, its cumulative gain for the entirety of 2025 exceeded 140%. This sustained upward movement in silver prices is driven by a combination of a fundamental supply-demand deficit, an influx of speculative capital, and resonance with multiple policy variables. Data from the World Silver Institute in 2025 indicated that the global silver market was experiencing its fifth consecutive year of supply shortage, with a substantial deficit of 95 million ounces. Furthermore, substantial investment funds are flowing in via Silver Exchange-Traded Funds (Silver ETFs). The World Silver Institute estimates that global Silver ETF holdings have increased by 187 million ounces, or nearly 6,000 tonnes, since the beginning of 2025, representing the largest increase outside of 2020.
On the policy front, actions by both China and the United States have reinforced silver's status as a strategic resource: the U.S. included it on its critical minerals list, while China plans to implement stricter export controls starting in 2026. A Morgan Stanley research report from January 2026 suggests that while this does not necessarily imply imminent restrictions, the mere possibility could further fragment the silver market, reduce liquidity, and amplify price volatility. Additionally, Russia, through its federal budget draft for 2025-2027 passed in September 2024, included silver in official reserve assets for the first time; India now allows silver jewelry and coins to be used as loan collateral. According to Rajeev Mehta, an economist at the Mumbai Precious Metals Research Centre, this reflects a "re-monetization" of silver.
Entering 2026, the market's speculative dynamics around silver have become clearer. A Morgan Stanley report from January noted that since the start of 2026, Silver ETF holdings have continued to decline as investors took profits. Meanwhile, a premium of approximately 15% for silver prices in China compared to the Chicago Mercantile Exchange indicates strong physical buying is absorbing every available ounce of marketable silver. In the face of investor fervor, some analysts have compared silver to meme stocks—equities experiencing extreme volatility due to social media hype rather than fundamentals. Steve Sosnick, Chief Strategist at Interactive Brokers, believes silver indeed exhibits a momentum-driven mania that seems to have transcended prior fundamental understanding and captured the public's imagination.
Despite multiple countries systematically reinforcing silver's strategic resource status through policy, an institutional gap remains between it and gold. Even though silver's price surge in 2025 (over 140%) far exceeded gold's (over 60%), the International Monetary Fund (IMF) still does not classify silver as an official reserve asset. Nevertheless, silver is undergoing a value re-assessment. Liao Bo, Co-Head of Macroeconomics at Zhejiang Securities Research Institute, believes that since Q4 2025, the boost to its valuation has been primarily driven by its financial attributes. Since 2025, the combination of Fed interest rate cuts and the impact of the Trump administration's "reciprocal tariffs" and "massive fiscal deficits" has led to a relative weakening of the US Dollar Index, further driving the return of silver's financial appeal. Furthermore, Li Gang, Director of the China Foreign Exchange Investment Research Institute, stated in a January 2026 media interview that expanding physical demand for silver from industries like new energy, photovoltaics, and semiconductors means silver is no longer just a shadow asset following gold, but a strategic metal with its own independent supply-demand logic.
Looking ahead, Ye Qianning, a precious metals researcher at GF Futures, stated that rising raw material costs might prompt downstream companies to seek substitutes for silver, potentially curbing industrial demand. However, areas like AI data centers are expected to bring substantial new demand. Long-term, both the financial and industrial attributes of silver are expected to continue supporting price increases. Ye Qianning cautioned that short-term factors like regulatory restrictions and market sentiment are causing异常 volatility. In this environment, investors need to closely monitor exchange risk control measures. Operationally, they can adopt a strategy of buying on dips with light positions, using physical metal or derivatives, and avoid chasing the rally.
Highest Surge Exceeding 65% Since Year Start From early January to January 23rd, the silver price rose continuously from around $80 per ounce, breaking through $100 per ounce on January 23rd. It continued climbing on January 26th, surpassing $110 per ounce and exceeding $112 per ounce—approximately ten times its low of $11.23 per ounce in 2020. Subsequently, the turbulent silver market continued. At 02:04 on January 27th, spot silver extended its gains, surging 14.00% intraday to $117.68 per ounce. Following the sharp rise, silver experienced a significant decline, retreating sharply to $103 per ounce just over three hours later. It then steadily recovered these losses, climbing back above $110 per ounce by 10:15 on January 27th and fluctuating higher, briefly breaking $120 per ounce on January 29th.
However, silver continued to be volatile thereafter. In the early hours of January 31st, spot silver recorded its largest-ever intraday decline, falling over 36% to a low of $74.28 per ounce. As of 17:55 on January 31st, spot silver was quoted at $85.012 per ounce, down over 26% on the day. Since the beginning of 2026, silver has surged over 65% at its peak. A January 2026 report from Dongfang Jincheng pointed out that the recent explosive rise in silver prices was primarily fueled by a combination of structural supply-demand imbalances, booming industrial demand, and strengthening financial attributes. From a fundamental supply-demand perspective, the structural shortage of silver persists, and the widening supply-demand gap provides strong support for prices. From a financial perspective, the Fed's continued rate-cutting cycle, coupled with concerns about political interference affecting its policy independence, has driven sustained weakness in the US Dollar Index, significantly enhancing the appeal of silver as a precious metal, while lower real rates reduce holding costs.
Against this backdrop, speculative capital continues to pour in. A Morgan Stanley report from January 2026 showed that since the start of 2026, Silver ETF holdings have been declining as investors took profits, but this hasn't been reflected in the price. Data shows that as of January 28, 2025, holdings of the world's largest silver ETF, the iShares Silver Trust, stood at 15,636.12 tonnes, a decrease of over 4% compared to 16,353.60 tonnes on January 5, 2026. The Morgan Stanley report further stated that this indicates other strong physical demand in the market is quickly absorbing newly available silver. Notably, physical demand in China is robust: amid strong local demand and tight supply, silver prices on the Shanghai Gold Exchange currently command a premium of about 15% compared to the CME.
This observation is corroborated in the domestic futures market. A January 2026 report from Huatai Futures further revealed that since the beginning of January 2026, up to January 22nd, the daily deferral fee direction for silver contracts had consistently been "short paying long," indicating that domestic silver remains a relatively "sought-after" commodity. The Huatai Futures report noted this phenomenon emerged in 2025. After October 2025, the settlement structure for the deferred delivery fee of the Shanghai Gold Exchange's silver spot deferred settlement contract, Ag (T+D), changed悄然: the proportion of "short paying long" settlements rapidly increased from a previous average of less than 40% to over 60% daily, with frequent occurrences of "shorts paying 100% of the deferral fee" for consecutive weeks. According to exchange rules, the deferral fee direction is determined by the daily delivery申报 imbalance; "short paying long" means buy delivery申报 consistently exceed sell申报, indicating periodic现货 demand outstripping supply. Huatai Futures believes this change, occurring alongside low social inventories and high import premiums,直观 reflects accelerating升温 in domestic physical silver buying—whether from increased photovoltaic production scheduling, electronics factory inventory replenishment, or retail investors hoarding现货 through deferred contracts—forcing shorts to pay a daily premium to buy time, with the squeeze spreading from futures to the现货交割环节.
Notably, despite declining Silver ETF holdings since January 2026, preliminary statistics from Dow Jones Market Data show that on January 26th, the two most actively traded stocks across the entire US market were two ETFs linked to the silver price. Topping the list was the short-oriented ProShares UltraShort Silver ETF, with nearly 800 million shares traded, indicating significant contrarian betting power. The long-oriented iShares Silver Trust ranked second with over 377 million shares traded. Despite falling ETF holdings, market trading remains fervent. Liao Bo analyzes that this displays characteristics of a profit-taking phase: early longs at low levels have a strong willingness to realize profits, while chasing funds and hedging卖盘 (producer hedging) are emerging. Currently entering a profit-realization phase, volatility is gradually increasing, manifesting as a systematic放大 in silver volatility and a reversal in the silver term structure. Liao Bo emphasized that the systematic放大 of silver volatility is an inevitable phenomenon driven by multiple factors. "Its small market size is a先天 condition, extreme supply-demand imbalance and financialization act as amplifiers, while狂热 market sentiment and剧烈 divergence in expectations ultimately price this high volatility into the derivatives market, keeping implied volatility persistently high."
Nations Amplify Focus on Silver Although the IMF has never formally recognized silver as an official reserve asset (the IMF's Balance of Payments and International Investment Position Manual shows official reserves explicitly comprise monetary gold, SDRs, reserve position in the IMF, and foreign currency assets), major global economies are gradually reshaping their strategic positioning regarding silver. Russia is a pioneer in including silver in official reserves. A federal draft law released by Russia on September 30, 2024, "On the Federal Budget for 2025 and the Planning Period of 2026 and 2027," showed the Russian Ministry of Finance proposed allocating 51.5 billion rubles in 2025 for purchasing precious metals and gemstones. The explanatory notes indicated plans to buy refined gold, silver, platinum, and palladium to increase the proportion of highly liquid assets in Russia's National Wealth Fund. The Russian Ministry of Finance believes: "Forming reserves of refined precious metals in Russia's National Wealth Fund will help ensure federal budget balance and stable economic development, as well as meet Russia's industrial needs in emergencies."
Liao Bo believes that after the outbreak of the Russia-Ukraine conflict in 2022, the freezing of Russian foreign exchange reserves highlighted the risks of a单一 reserve structure. Against this backdrop, Russia accelerated reserve diversification. The core goal of including silver in its reserves is to reduce reliance on the US dollar and gold, forming a more resilient reserve system. This move aligns with the current global trend of central bank reserve diversification. "Russia's initiation of silver reserves may become a starting point for变革 in the global reserve landscape. Its subsequent diffusion效应 among emerging market countries will主导 the long-term process of silver valuation重构," Liao Bo emphasized. Liao Bo stated that no other central banks have yet followed suit in including silver in official reserves, suggesting close attention to the动向 of major global central banks going forward. The international reserve adjustment behaviors of major silver-producing countries, such as Mexico, China, Peru, Chile, and Bolivia, are particularly值得关注. However, due to issues like unstable silver supply and the security of physical assets, he judges that non-silver-producing countries' central banks face significant uncertainty in including silver in reserves.
Beyond Russia, recent developments in other countries regarding silver have also attracted market attention. India has赋予 silver a new role from the perspective of activating its民间 financial属性. According to the Reserve Bank of India's latest Weekly Statistical Supplement report from January 2026, India's current official reserves comprise foreign currency assets, gold, SDRs, and the reserve position in the IMF, excluding silver. However, the RBI's "Guidelines on Loans against Gold and Silver Jewellery" issued in 2025, in Rajeev Mehta's view, signifies silver "beginning to regain monetary属性 – slowly, at the household level." This Indian policy takes effect from April 2026. Its core content allows banks and non-banking financial institutions to accept silver jewelry, ornaments, and coins as loan collateral. Rajeev Mehta explained that in India, gold has long been a bank-acceptable,抵押 asset; now including silver broadens its usage channels and strengthens its monetary属性.
Simultaneously, the United States and China are strengthening their control over silver resources through strategic reserves and export controls, respectively. The US officially designates silver as a "critical mineral" and has legislated to establish a strategic reserve. In November 2025, the US included silver among ten minerals on its "2025 Critical Minerals List."紧接着 in January 2026, US Congress members proposed the "Ensuring American Security of Essential and Critical Resources and Elements Act," planning to establish a $2.5 billion "Strategic Resilience Reserve" to support production, extraction, processing, refining, reuse, repurposing, and recycling of critical minerals and materials in the US and partner countries; support and protect price stability and economic sustainability for critical minerals and materials; and maximize assurance that at each stage of the supply chain, the "productivity rate" for each critical mineral/material equals or exceeds a board-determined reasonable percentage (not less than 25%). Additionally, the "dependency rate" for each should be equal to or below a reasonable board-determined percentage (not higher than 75%), among other requirements.
China has tightened control on the export side of silver. Documents released by China's Ministry of Commerce on October 26, 2025, show that China's new silver export control policy upgrades the previous quota system to a strict "case-by-case" licensing regime. Only enterprises with an annual production capacity of over 80 tonnes (over 40 tonnes for western enterprises) and a three-year track record of actual exports can apply for export qualifications. The审批 scope covers key dimensions like buyer background and usage compliance, with the control period lasting at least until the end of 2027. A Morgan Stanley report from January 2026 believes that while China's new policy does not necessarily mean imminent restrictions, the mere possibility could further fragment the silver market, reduce liquidity, and amplify price volatility. The risk of supply disruption might prompt market participants to secure their own inventories rather than share缓冲 reserves globally.
The Dongfang Jincheng report further分析 stated that silver's inclusion on the US critical minerals list, coupled with China's export controls effective January 2026, reinforces its strategic resource属性, further pushing up prices. Considering the silver market's size is only one-tenth that of gold's,同等 capital inflows result in amplified volatility, further strengthening its upward momentum. Notably, some institutions believe central bank demand cannot provide structural support for silver as it does for gold. A Goldman Sachs report from October 2025 cautioned that the reason lies in silver's lack of the institutional and economic attributes supporting gold. The IMF's reserve framework does not recognize silver, and it holds no significant place in modern central bank portfolios. Furthermore, its exposure to industrial uses gives it pro-cyclical characteristics, making it less suitable as a portfolio hedge. Its higher volatility and poorer liquidity—these traits reduce its utility as a reserve asset. In contrast, gold's physical properties make it more suitable for reserve management. Its scarcity is about 10 times that of silver, its value per ounce is 80 times higher, and its density is twice that of silver, making it more efficient in storage, transport, and security.
What Lies Ahead for the Trend? Amid volatile but rising silver prices, several institutions remain bullish on silver but warn of short-term correction risks. From a supply-demand perspective, a January 2026 report from Founders Securities Research Institute indicates that long-term rigid growth in industrial demand will provide core support for silver prices. The report points out that long-term, the photovoltaic industry remains the primary demand driver. Increased global spending on green infrastructure to meet 2030 climate targets, coupled with the technological transition from PERC cells to some N-type high-efficiency cells, significantly increases silver consumption, and silver's high conductivity is difficult to substitute. The report believes policies promoting光伏 installations in China, the EU, etc., will also continue to拉动 demand. Data released by China's National Energy Administration on January 28, 2026, showed that as of end-2025, China's solar power capacity reached 1.2 billion kilowatts, a year-on-year increase of 35.4%. China's 2035 Nationally Determined Contribution report aims for wind and solar power capacity to reach 3.6 billion kilowatts by 2035. Additionally, solar mandates in the EU's Energy Performance of Buildings Directive will accelerate solar installation on new and renovated residential and non-residential buildings. It is estimated that by 2030, over half of the EU's 700 GW solar capacity target could be met through non-residential building rooftops.
The report also notes that in the new energy vehicle sector, the collaboration on solid-state batteries between Samsung SDI, a core subsidiary of the Samsung Group, and Tesla has materialized. The new solid-state batteries use a silver-carbon composite layer, with a single EV battery pack potentially consuming about 1 kg of silver. If this technology achieves 20% market penetration, it could add approximately 16,000 tonnes of annual silver demand, equivalent to 64% of current global mine production. Furthermore, areas like AI computing servers and 5G base stations rely on silver's excellent thermal and electrical conductivity, with tech giants' hundreds of billions in AI infrastructure investments further expanding silver demand. Concurrently, institutions warn of "de-silvering" risks. Michael Hsueh, a precious metals analyst at Deutsche Bank, cautioned in a January 2026 report that in industrial consumption, an established material-saving mechanism exists, whose urgency naturally increases with rising prices. According to Bloomberg data, the proportion of silver cost in solar cell material costs has risen from 14% in 2025 to 29%.
Short-term, institutions highlight potential changes in tariff policies that could trigger price corrections. A Goldman Sachs report from January 2026 believes the likelihood of the US imposing tariffs on silver is low. The clarification of tariff policies might prompt some metal to flow out of the US, thereby easing tightness in London inventories and triggering a silver price correction. From a financial属性 perspective, Liao Bo expects that from a medium-to-long-term view, the direction of震荡上行 for silver prices is difficult to change. In the current global monetary system, the US dollar长期 dominates, but in recent years, many central banks and market participants have shown a greater preference for seeking diversified asset allocations to counter risks associated with单一 dollar reliance. Especially against the backdrop of massive US Treasury oversupply, de-dollarization has become a trend, and precious metals like gold and silver are expected to gain higher market attention. Furthermore, Liao Bo believes that silver, belonging to the precious metals category, inherently possesses safe-haven and monetary attributes. The previous precious metal price rises driven by these attributes were集中体现在 gold, creating a relative valuation洼地 for silver. Silver's investment returns are expected to outperform gold's. "Silver itself has characteristics of high price elasticity, its overall holdings are relatively concentrated, and trading behaviors of some major institutions significantly impact its price; short-term speculative demand is also expected to drive silver prices higher," Liao Bo added.
A Citibank report from late January 2026 also stated that silver's current trend is primarily driven by fund allocation, performing like "gold squared" or "enhanced gold." Citi believes this trend could continue until silver becomes expensive relative to gold by historical standards. Citi expects silver prices to have another 30% to 40% upside in the coming weeks, targeting $150 per ounce. Amid the bullish sentiment, some institutions warn of price volatility and valuation bubble risks. A Dongfang Jincheng report from January 2026 cautioned that silver's volatility is typically 2-3 times that of gold's, with single-day declines potentially exceeding 7%. Additionally, the recent gold-silver ratio falling below 50 signals significant overbought conditions; extreme ratios often lead to mean reversion, potentially causing silver price adjustments. The approaching March delivery month could also trigger squeeze risks, exacerbating price volatility.
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