Recently, people have been asking me about the future trend of silver, especially around the year 2026. To be honest, in the past I also regarded silver as a subsidiary of gold, but last year's market move changed my view.

Last year, silver surged over 140%, a number that alone speaks volumes. Many still analyze silver with outdated frameworks, either simply saying "rate cuts lead to rises," or overemphasizing green energy demand and calculating a bunch of pretty numbers. But these analyses all overlook a core issue: silver's true trend is never determined by a single narrative.

My logic for analyzing silver is simple—it's one question: Is the market currently treating it as a safe-haven asset, or just as an industrial raw material? This positioning determines everything. Historically, major silver rallies occurred when macro environments reprice real assets, and market risk appetite also rebounded. In short, silver excels at trending in the "semi-safe, semi-speculative" gray area.

Why did silver rise so sharply last year? Geopolitical risks were re-priced, the dollar index briefly fell below 98, and real interest rates declined. At the same time, demand for silver from solar energy, electric vehicles, and AI data centers was genuinely increasing, but supply couldn't keep up. London market inventories remained tight—this isn't a short-term phenomenon but a structural issue. Coupled with strong ETF and physical buying, and momentum-driven buying intensifying, this propelled last year's rapid surge.

Looking ahead to 2026, I see at least four structural factors worth paying attention to.

First is monetary policy. Whether inflation has truly ended or not, the market consensus has formed—that interest rates are no longer rising but gradually coming down. The Fed expects to cut 1 to 2 more times this year, and real interest rates have already started to compress. This is directly bullish for gold, conditionally bullish for silver—especially when industrial leverage is amplified.

Second is supply rigidity. Silver has been in a supply deficit for five consecutive years. About 70% of global silver is a byproduct of copper, lead, and zinc mining. This means the elasticity of silver supply isn't driven by silver prices but depends on the mining cycles of other metals. When supply-demand imbalance occurs, prices tend to jump sharply. LBMA and COMEX inventories have fallen to multi-year lows, indicating increasing tension in the physical market.

Third is the bottom support of industrial demand. Solar, EVs, semiconductors, AI data centers—these keep silver demand relatively stable compared to the past. But I must be frank—industrial demand alone won't cause silver to skyrocket; it will only make it less likely to die. The real price push comes from the resonance of industrial bottom support with financial buying.

Finally, the gold-silver ratio. This ratio is truly a thermometer of market sentiment. At the end of 2025, the gold-silver ratio was about 66:1; the long-term historical average is between 60 and 75:1. During the 2011 bull market, it compressed to 30:1. Now, from above 80, it converges to 66, indicating room for silver to catch up. If gold remains conservatively at $4,200, a conservative target for silver is $70, with an aggressive target possibly reaching $105.

Regarding industrial demand, many have heard that solar energy needs silver, but what’s truly underestimated is the unit demand jump brought by technological shifts. N-Type solar cell technology, especially TOPCon and HJT, has gradually become mainstream after 2025. The silver paste required per watt is significantly higher than in P-Type technology. This isn't a choice by manufacturers but a physical law lower limit. As global photovoltaic capacity approaches hundreds of gigawatts, even a slight increase in silver per cell, scaled across the entire industry chain, results in a huge demand surge.

Another overlooked factor is AI conductive materials. Silver is the best conductor on Earth. After AI computing power entered an energy consumption bottleneck, this became a real cost issue. High-speed servers, data centers, high-density connectors—aiming to reduce energy consumption and heat loss—are forced to increase silver content in components. This isn't about cost-saving preferences but about efficiency. Tech giants must pay for efficiency, and this demand is highly rigid, almost unaffected by price declines.

From a technical perspective, silver's 45-year chart shows a massive cup-and-handle pattern. The previous high points around $49.5 to $50, in 1980 and 2011 respectively, have long been tough resistance zones. Last year, not only did it break above $50, but it also consolidated above and continued to make new highs. This indicates that $50 has officially become a key support in the long-term trend. Currently, silver trades near $71, and the market has entered a price discovery phase, where upward momentum often intensifies. After breaking $70, there are almost no clear historical trapped zones above. Short-term momentum is indeed hot, but as long as the monthly structure isn't broken, this bullish run can extend further.

What we really need to monitor isn't just the price itself, but whether LBMA and COMEX deliverable inventories continue to decline. If Q1 inventories keep flowing out this year, it signals increasing tension in the physical market. When technical breakouts align with fundamental tightening, a short squeeze is not unlikely. But chasing high at the top carries significant risk. A more rational approach is waiting for a pullback to support levels, then gradually building positions or using futures to trade the waves.

Currently, two key retracement zones are important. The first is $65–$68, a recent dense trading area after the breakout—if the trend remains healthy, a pullback here should see buying support. The second is $55–$60, which corresponds to longer-term structural support. If prices fall back to this zone, the market needs to reassess whether the bullish narrative still holds.

What are the risks of trading silver? Short-term overheating is one. RSI and other oscillators have been in extreme zones for a long time, and low-liquidity periods before holidays can lead to sharp corrections. Rapid shifts in macro policy are also risks—if the Fed turns hawkish or economic data points to a hard landing, silver, being highly linked to real demand, could face short-term pressure. Sentiment reversal is a real danger—once prices enter the discovery zone, increased short-term capital and leverage can cause very rapid declines. Also, a slowdown in industrial demand—if the global economy weakens or green energy investments underperform—could reduce industrial consumption. Lastly, supply-side surprises are possible—although the five-year deficit persists, high prices might stimulate mine restarts or increased recycling.

How to trade silver? Physical silver in hand offers safety, but premiums are high—buying may cost 20–30% above spot. Silver ETFs are liquid but have management fees, and you don't truly own the metal. For traders aiming to capture high volatility by 2026, CFDs are the most efficient tool. Silver's intraday volatility often reaches 3–5%. While the long-term trend is bullish, the movement tends to be "three steps up, two steps back." When prices overheat, quick short positions can hedge, then re-enter long after a correction. CFDs lack physical premiums, allow both long and short, and trade 24/7, but leverage amplifies risks.

Honestly, silver has never been an asset you can just hold and feel secure. It’s more like a trading instrument that requires understanding market rhythm, capital temperament, and macro positioning. Its future depends on whether you’re willing to endure volatility and establish your judgment before the market truly turns. If you’re only looking for an asset that "must go up," silver probably isn’t suitable. But if you’re seeking an asset that might surprise you at macro turning points, silver at least deserves to be on your watchlist.