Silver prices rose on Monday, reaching $84.16 per troy ounce. This marks a 5.43% increase from $79.82 and an 18.39% rise so far this year. Silver costs $2.71 per gram. The Gold/Silver ratio dropped to 54.61, down from 56.47 the previous Friday.

Precious Metal Uses

Silver is a precious metal valued for its ability to store wealth and facilitate trade. Although it is used less than gold, many investors choose it for portfolio diversification and as a hedge against inflation. Several factors can affect silver prices. For instance, geopolitical tensions or worries about a recession can push prices higher, as silver is seen as a safe investment. A strong US dollar often keeps prices in check, while a weaker dollar tends to boost them. Industrial demand, especially in electronics and solar energy, plays a significant role in silver’s pricing. Economic activity in the US, China, and India is important due to their large industries and jewellery markets. Silver prices often follow gold prices. When gold rises, silver typically does as well due to their similar safe-haven qualities. The Gold/Silver ratio can provide insight into how the two metals are valued relative to each other.

Investment Demand Surge

With silver prices climbing above $84 an ounce, the upward trend is notable. This increase is largely driven by a weakening US dollar, political pressure on the Federal Reserve, and ongoing global tensions. Traders in derivatives should consider maintaining or starting bullish positions in the coming weeks. The outlook for industrial demand is strong, which supports higher prices. For example, data from the fourth quarter of 2025 showed a 22% year-over-year increase in global solar panel installations, a major use for silver. The positive growth forecast for the G20 suggests that industrial consumption will continue. Investment demand for silver is also rising, with significant inflows into silver-backed ETFs in the first two weeks of 2026. Major funds like the iShares Silver Trust (SLV) saw nearly $2 billion in net inflows this year, indicating a shift towards tangible assets as confidence in central banks declines. The Gold/Silver ratio is now at 54.61, indicating strong performance for silver compared to gold. The average ratio in 2025 was around 68, making this drop a clear sign that silver is currently gaining momentum. This situation makes strategies like going long on silver futures while shorting gold futures more appealing. Due to the 18% price increase this year, volatility is higher, leading to more expensive options. Traders might consider buying call options for further gains or using bull call spreads to lower initial costs. While the trend is positive, the rapid rally may lead to sharp, though likely short-lived, pullbacks as profits are taken. Create your live VT Markets account and start trading now.

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