Silver Records: Is breaking $45 the starting point?
On July 31, 2026, the global silver market reached a milestone. COMEX silver futures contracts surged in NY trading, briefly touching $45.88 per ounce before closing at $45.62, marking a daily gain of up to 6.8% and the highest price since 1975. Previously, silver was trading around $38 at the end of June, and it soared by 20% in just one month, becoming the most dazzling star in the global commodity market.
On the same day, the largest silver ETF, iShares Silver Trust (SLV), announced its holdings data, showing a daily increase of 567 tons of silver, the largest increase since March 2020. Based on the daily average price, this ETF absorbed over $1 billion in silver in a single day, indicating that institutional investors are buying silver at an unprecedented speed. Furthermore, CFTC holdings reports show that net long positions in COMEX silver futures have climbed to a record 98,000 contracts, a 35% increase from a month ago, signaling a fierce influx of funds.
Supply Shortage Expands for Six Consecutive Years, Photovoltaic Demand Becomes the "Strongest Engine"
The core driver of this silver surge stems from a fundamental shift in supply and demand conditions. The Silver Institute's "Mid-Year Supply and Demand Report for 2026," released on July 28, predicted the global silver supply and demand deficit for 2026 to rise from 6,500 tons at the beginning of the year to 7,800 tons. This not only exceeds market expectations but also signals that the global silver market will experience a structural shortage for the sixth consecutive year, with the deficit size reaching a record high since 1990.
The report specifically pointed out that silver demand in the photovoltaic industry is the biggest variable. With the rapid increase in penetration of N-type efficient batteries and bifacial modules, the silver consumption per unit of photovoltaic power generation increased by about 40% compared to traditional PERC cells. In 2026, global photovoltaic silver consumption is projected to reach 230 million ounces, an 18% year-on-year increase, surpassing 15% of total global silver demand for the first time. Meanwhile, emerging sectors such as new energy vehicles, 5G communications, and medical electronics also maintain an average annual growth rate of over 8%, jointly driving industrial demand to a new historical high.
In contrast to the explosion in demand, the supply side is continuously "dropping chains." Major global silver producing regions—Latin America (especially Peru and Chile)—have successively faced strikes by miners, community protests, and tightening environmental permit approvals, forcing several large mines to lower their production targets for the year. Furthermore, since about 80% of silver is a byproduct of base metals like copper, lead, and zinc, new production capacity for primary silver mines is extremely limited amid weak base metal prices and insufficient mining investment willingness. Global mine silver production is only expected to increase by 1.2% in 2026, far below the growth rate, deepening the supply-demand rift.
Inventory Crisis, "Silver Hard to Find" in Spot Market
The direct impact of supply-demand imbalance is the sharp depletion of global silver inventories. Latest data from the London Bullion Market Association (LBMA) shows that silver inventory in its certified warehouses has declined for three consecutive months, dropping to 24,500 tons by the end of July, the lowest level in five years. More concerning is that the proportion of "qualified silver bars" available for free delivery has fallen below 60%, whereas it was typically over 75% last year. In the New York Commodity Exchange, the queue time for silver delivery has lengthened to two weeks, and some market makers are beginning to charge high premiums on futures contracts beyond October, indicating a sign of tightness in spot market sentiment. In the retail market, the Eagle Silver Coins from the U.S. Mint and the Royal Mint of Canada have been sold out for two consecutive months, requiring a waiting period of 6-8 weeks to replenish stock. The situation is the same in the Asian market; the price premium for silver on the Shanghai Gold Exchange once soared to $2.5 per ounce, reaching a high not seen since 2021, indicating that Asian buyers are aggressively purchasing physical silver globally. Thai silver prices also soar, jewelry store inventories are running low. The surge in international silver prices quickly transmits to the domestic Thai market. The silver reference price announced by the Gold Traders Association on July 31st was 1,450 Baht per troy ounce, a significant increase of 23% from the beginning of the year at 1,180 Baht, setting a new historical high. Famous jewelry stores in Mong Kok Tang People's Street (Yaohua Road) indicate that enthusiasm for purchasing silver bars and jewelry is unprecedented, both among local investors and foreign tourists. Inventory of some popular styles has been cleared, and merchants are forced to suspend accepting custom orders. Meanwhile, trading volume for silver futures contracts on the Thailand Futures Exchange (TFEX) increased to an average of 12,000 contracts per day in the last week of July, quadrupling compared to the same period last year. On the Thailand Stock Exchange (SET), stocks related to precious metal mining show strong performance. Notably, KGR (hypothetical stock code), which holds mining concessions in Thailand, closed at its upper limit on July 31st, driving the sector index up by 9%. Furthermore, local ETFs tracking international precious metal prices have seen significant net buying, with premium rates reaching up to 3%, reflecting a sharp increase in demand for precious metal allocation among Thai retail investors. Institutional Interpretation: Has a Silver "Super Cycle" Begun? Several international investment banks have raised their silver price forecasts for this market trend. Goldman Sachs has significantly raised its forecast price for silver over the next 12 months from $40 to $50, emphasizing that "after gold breaks $2500, the monetary attributes of silver will be further explored by the market, while its industrial attributes will benefit from the global green energy revolution, creating a dual driving force." Citi Bank is more optimistic, believing that if global manufacturing PMI continues to rise, silver prices could challenge the historical high of $55 in the first half of 2027 (after inflation adjustment). However, the market is not without caution. A commodity manager at a European hedge fund pointed out that if silver prices rise more than 20% in 30 trading days, the RSI indicator has been in overbought territory (above 80) for two consecutive weeks, significantly increasing the probability of a short-term technical pullback. "Historical experience shows that the volatility of silver is usually twice that of gold; rampant rises are often accompanied by sharp pullbacks. Investors should not blindly chase highs; it is recommended to wait for a pullback to the $41-$42 range before initiating a light position." Local analysts in Thailand believe that silver still holds prominent long-term allocation value for ordinary investors. Compared to gold, silver prices are still at a relative low, and the improvement in fundamentals driven by photovoltaic demand is a certain long-term trend. However, considering the shallow liquidity in the local market, it is recommended to participate through compliant ETF or futures channels, avoiding holding physical silver bars at a high premium. ## Outlook for the Second Half: Key Variables and Risks to Monitor Looking ahead to the second half of 2026, the bullish and bearish game in the silver market will revolve around the following core variables:
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