On July 31, 2026, the Singapore market witnessed a historic moment—the main SGX silver futures contract touched $60.25 per ounce intraday, finally closing at $59.98, up 4.2% on the day, a record high since 1980. Meanwhile, gold traded narrowly around $4,200, and the gold-silver ratio quickly dropped to the 70 level, the lowest in nearly a decade. This independent surge in silver is drawing intense global investor attention.
Industrial demand explosion widens silver supply-demand gap
The core driver of this silver price surge is explosive growth in industrial demand. According to the latest data from the Silver Institute, global silver industrial demand rose 12% year-on-year in H1 2026, with the solar industry contributing the largest increase. As countries accelerate carbon neutrality goals, solar installations are booming: each gigawatt of modules consumes about 2.5 tonnes of silver. In the first half alone, solar accounted for 4,200 tonnes of silver, or 42% of total industrial demand.
At the same time, the rapid development of 5G communications, new energy vehicles and AI hardware has further boosted demand for silver in electronic and electrical components. In particular, AI servers' high-performance connectors, sensors and charging infrastructure all have irreplaceable rigid demand for silver. Industry forecasters expect global industrial silver demand to exceed 22,000 tonnes in 2026, while mine supply may grow only about 3%, leaving a supply-demand gap of over 5,000 tonnes—the largest in nearly 20 years.
Singapore SGX inventories run critically low as physical silver is continuously withdrawn
As Asia's precious metals delivery hub, Singapore Exchange (SGX) inventory changes are seen as a key barometer of global silver supply and demand. As of July 30, SGX registered silver inventories fell to just 13,200 tonnes, down 38% since the start of the year, the lowest on record. Large volumes of physical silver are being withdrawn to fulfill industrial orders, while new inflows fall far short of demand.
Analysts note that the sharp decline in SGX inventories reflects tight physical supply pressure in Asia. On one hand, solar construction in Southeast Asian emerging markets is accelerating, with module plants in Malaysia, Vietnam and others sharply raising silver demand. On the other hand, festival buying and investment demand from major consumers such as India and China continue to pour in, further intensifying physical supply shortages.
Gold-silver ratio falls to 70: silver significantly undervalued relative to gold
The gold-silver ratio is a key indicator of relative strength between gold and silver. After silver's surge, the ratio narrowed sharply from around 95 at the start of the year to about 70, meaning roughly 70 ounces of silver are now needed to buy one ounce of gold. Over the past century, the average ratio has been about 47; the current level, though still above the historical average, has returned to lows not seen since 2018.
"A ratio near 70 is usually seen as the starting signal for silver value repair," said a Singapore precious metals trader. "When silver's industrial and monetary attributes resonate, silver often stages an independent rally outpacing gold. Falling inventories and a deeply backwardated forward curve suggest the tight physical market will be hard to reverse in coming quarters."
Institutions warn: short-term overbought, beware of pullback risk
Despite the bullish long-term trend, several investment banks have issued short-term warnings. UBS precious metals strategists noted that silver has risen more than 15% in just two weeks, technical indicators have entered overbought territory, and RSI has stayed above 80 for consecutive days, creating profit-taking pressure in the near term. Moreover, hawkish signals from global central banks or a stronger dollar could also trigger a sharp correction.
However, the market generally believes that the supply-demand fundamentals of silver have undergone a structural shift. The global solar industry is transitioning to N-type cell technology with higher silver consumption per unit, so silver usage per watt is rising rather than falling. Meanwhile, by-product silver from copper, lead, and zinc mines—which accounts for a large share of mined silver—is growing slowly, and this supply-side constraint will continue to support a higher silver price floor.
Singapore market outlook: watch futures-spot spreads and delivery data
For investors, Singapore SGX silver contracts provide a good channel for price discovery and risk management. Currently, the SGX main contract trades at a slight premium to London spot, while declining inventories point to possible short squeezes in upcoming delivery months. Investors are advised to closely monitor Singapore inventory changes released every Friday and output guidance from major miners. If inventories continue to fall, silver could challenge $65 or higher.
Overall, 2026 is set to be a milestone year in the silver bull market. Against the dual backdrop of the green energy revolution and global reflation, silver's scarcity is being repriced. For Singapore investors allocating to precious metals, adding silver positions in a timely manner may generate substantial returns in this historic rally.
(This article is compiled from public information and does not constitute investment advice. Investing involves risk; proceed with caution.)
