Is Silver Entering a New Supercycle? A Market Overview

Silver has captured global attention after surging past $90 per ounce, marking a historic milestone for the precious metal. The price reached new all-time highs above $92–$93 before experiencing sharp pullbacks, highlighting both strong momentum and elevated volatility. This move reinforces silver’s role as both a safe-haven asset and a critical industrial metal.

Why Is the Silver Price Rising?

Several forces have converged to push the silver price above $90. One major driver is macroeconomic uncertainty, particularly expectations of a lower interest-rate environment. Political pressure on central banks and concerns about interference in monetary policy have increased investor demand for precious metals, which historically perform well when real yields fall.

Geopolitical risk has also played a role. Tensions involving trade policy, tariffs, and global security have fueled demand for hard assets. Although the US recently refrained from imposing sweeping tariffs on critical minerals, fears of future restrictions have already contributed to stockpiling and a tighter global silver supply.

Another key factor is silver’s persistent supply deficit. Limited mine output, combined with logistical constraints and inventory build-ups in US warehouses, has kept the market structurally tight, supporting higher prices into 2026.

Industrial Demand Is a Major Tailwind

Beyond its monetary appeal, silver’s industrial demand has become a powerful long-term driver. According to industry data, demand from solar energy, electric vehicles, data centers, and artificial intelligence infrastructure is expected to accelerate through 2030. 

This growing industrial reliance differentiates silver from gold and provides a strong foundation for sustained demand.

Looking ahead to 2026, silver is showing strong potential to continue its upward trajectory, with traders openly discussing the possibility of the metal reaching $100 an ounce. Analysts suggest that achieving this milestone would require a combination of factors: continued expectations for Federal Reserve rate cuts, persistent geopolitical uncertainty driving safe-haven demand, a tight physical market with limited inventories, and sustained investor follow-through after price breakouts. While such a scenario is plausible, silver’s characteristic volatility means sharp pullbacks and swings in sentiment are likely along the way, making it more realistic to view $100 as a potential trading level rather than a price the market will hold steadily.

The 2026 Reality Check: Managing the Risk of a Pullback

While the psychological drive toward $100 is a dominant market narrative, institutional forecasts for 2026 remain cautious. HSBC recently projected a broad trading range of $58–$88, suggesting that silver may be "fundamentally overvalued" following its historic 230% rally. Similarly, Mirae Asset has warned that silver carries a higher drawdown risk than gold this year, noting that current investor positioning appears "stretched" and in "overheated territory." Historically, silver is prone to sudden 30%–40% mean-reversion corrections when it detaches from its long-term moving averages. Consequently, investors should view $100 as a zone of extreme resistance where significant profit-taking and high volatility are likely.

Volatility: A Defining Characteristic of Silver

Silver is known for sharp price swings, and this behavior is not unusual. Throughout history, the metal has often risen rapidly during periods of strong investor enthusiasm, only to pull back just as quickly once sentiment shifts.

Well-known examples include the Hunt brothers’ attempt to corner the silver market in 1980 and the commodity boom of 2011. In both cases, prices surged in a short period before falling sharply, showing how quickly momentum can reverse.

Today, similar short-term warning signs are visible. Record trading volumes, prices far above long-term averages, and heightened retail buying suggest the market may be overheated. That said, these signals do not necessarily mean prices have peaked. Silver has a long history of overshooting in both directions before eventually settling into a more stable range.

Silver vs. Gold: Why Silver Is Outperforming

Silver has significantly outperformed gold in percentage terms, with gains far exceeding those of its yellow counterpart. As gold reached record highs, investors increasingly rotated into silver, attracted by its relatively lower price and higher upside potential. 

Because silver is a smaller market, it tends to react more aggressively to shifts in investor sentiment and macroeconomic developments.

For investors who are mindful of Islamic principles, it is important to consider the Shariah compliance of precious metals. To explore the permissibility and guidelines surrounding Silverinvestments, you can read our detailed blog post examining its status under Islamic finance principles.

Key Takeaway for Investors

Silver’s surge past $90 per ounce reflects a rare alignment of monetary uncertainty, geopolitical risk, supply constraints, and accelerating industrial demand. While short-term volatility remains a defining feature, the medium- to long-term outlook continues to appear constructive.

For investors, silver is best approached as a strategic asset rather than a speculative trade, one that can support diversification, hedge against economic uncertainty, and provide exposure to future-focused industries.

At Tabadulat, we believe informed decisions start with understanding market structure and long-term drivers. Silver’s recent performance underscores why precious metals continue to play a vital role in modern portfolios.

FAQS

Will silver prices increase in 2026?

Silver prices in 2026 are expected to be influenced by industrial demand, geopolitical uncertainty, Federal Reserve policy, and global supply constraints. Historical trends show that silver markets can experience sharp swings alongside broader macroeconomic factors.

Why is Warren Buffett buying silver?

Warren Buffett’s historical interest in silver - particularly during the 1960s and again in the late 1990s - is frequently cited as an example of how long-term investors analyse supply-and-demand imbalances in commodity markets.

As of January 2026, there is no public filing indicating that Berkshire Hathaway is currently purchasing silver.

Is it a good time to invest in silver?

Current silver market conditions show high volatility, driven by industrial demand, geopolitical risk, and monetary policy expectations. Prices can move quickly in response to news or economic data, reflecting silver’s historical pattern of sharp short-term fluctuations.

Is it better to buy silver or gold in 2026?

Silver and gold have different market roles: gold is primarily a safe-haven asset, while silver has both investment and industrial demand. Relative performance in 2026 depends on macroeconomic trends, industrial consumption, and investor interest in precious metals.

Is silver a poor investment?

Silver has historically experienced periods of rapid gains and steep corrections. Its dual role as a precious metal and industrial commodity provides unique market dynamics, but short-term volatility can make price movements unpredictable.

Disclaimer & Disclosure

This article is for educational and informational purposes only and does not constitute investment advice. References to silver, market dynamics, or public investors are based on historical information and publicly available sources. There is no representation of current investment positions or future performance.