Spot Silver Breaks Above $87 Per Ounce, Up Over 21% Year-to-Date

Silver prices hit a record high of $87 per ounce on January 13, 2026, marking a 21% increase year-to-date. The upward trend follows strong momentum in the previous year, where the precious metal gained around 150% in 2025. The recent surge is attributed to a combination of industrial demand and safe-haven buying amid ongoing geopolitical tensions. Analysts and investors are closely watching how structural supply constraints and macroeconomic factors will influence the trajectory of silver prices in the coming months.

Industrial demand remains a key factor in the current rally. Silver is a critical component in technologies such as solar panels, electric vehicles, and electronics, with around 58% of global demand tied to industrial applications. Growing reliance on the metal in the energy transition and advanced manufacturing is expected to keep demand strong, especially in 2026 according to analysis. In addition, supply-side constraints persist. Only 27% of global silver output comes from primary silver mines, with the rest derived from byproducts of other metals. This limits the industry's ability to respond to rising demand.

Geopolitical risks have also contributed to the rally. Conflicts in Eastern Europe and the Middle East have reinforced demand for safe-haven assets, including silver. Moreover, recent news of a criminal investigation into Federal Reserve Chair Jerome Powell triggered a sharp increase in silver prices. The combination of geopolitical uncertainty and tightening monetary policy has made silver an attractive hedge for investors.

Why Did This Happen?

The current price surge is the result of multiple converging factors. Strong industrial demand, tight supply conditions, and macroeconomic tailwinds have created a bullish environment. Silver is also benefiting from its inclusion in the U.S. critical minerals list, which has limited supply availability in the New York market. These factors, combined with thin trading conditions during the holiday period, have led to exaggerated price movements.

Market analysts highlight the role of ETFs and physical buying in sustaining the rally. Exchange-traded funds such as SLV and SIVR have seen significant inflows in 2025, with accumulation expected to continue into the first half of 2026. Institutional investors and retail buyers are showing renewed interest in silver as a strategic asset, particularly in the context of global uncertainty.

What Are Analysts Watching Next?

Despite the strong upward trend, analysts have highlighted several risks. Structural supply deficits, while bullish in the short term, are expected to narrow in 2026 and 2027 as mine output and recycling increase. HSBC forecasts a global silver deficit of around 140 million ounces in 2026, down from 230 million in 2025. This suggests that while prices remain supported, the pace of the rally may slow in the second half of the year.

Investor sentiment is another factor under scrutiny. While ETF holdings remain a key pillar of demand, there are signs that momentum may taper off as prices rise. High prices have already led to substitution and thrifting in some industrial sectors, potentially softening demand over time. At the same time, monetary policy remains a wildcard. If the Federal Reserve delays rate cuts or the U.S. dollar strengthens, silver may lose some of its appeal against high-yield assets.

Bullish scenarios suggest that silver could test $100 per ounce if demand remains strong and supply continues to tighten. On the other hand, bearish scenarios highlight the potential for a pullback if industrial substitution accelerates or if geopolitical tensions ease according to analysis. The market will also be watching for signs of policy changes that could impact silver's availability and pricing structure.

What's Next for the Market?

The coming months will be critical for silver's trajectory. A clear break above $83.36—previously a key resistance level— would signal a continuation of the bullish trend. However, sustained trading above this level will need to be supported by strong fundamentals and continued investor demand.

Market participants will be closely following developments in China, where new export licensing rules have added strain on global supply. Additionally, the implementation of new mining projects and technological advancements in recycling could help ease long-term supply constraints. For now, the rally shows no signs of abating, with analysts forecasting a volatile but ultimately higher trend for silver in 2026.