On July 28, 2026, silver prices in the Singapore precious metals market continued a modest upward trend. As of press time, spot silver traded at $29.85 per ounce, up 3.2% from the start of the month. Behind this movement is a structural surge in industrial silver demand — silver usage in solar photovoltaic and 5G communications reached record highs of 210 million and 80 million ounces respectively in H1, driving overall industrial demand up 12% year-on-year. Analysts point out that as global energy transition and digitalization accelerate, silver's industrial attributes are becoming the core force driving price movements.
\n\nStrong Industrial Demand: Solar PV and 5G Dual Engines
\nAccording to the International Silver Institute's recently released 2026 Mid-Year Report on Silver Industrial Demand, total global silver industrial demand reached 580 million ounces in H1 2026, an increase of 62 million ounces from the same period last year. The solar photovoltaic sector continued to be the largest incremental source. Due to silver paste's critical role as a conductive electrode in solar cells, the explosive growth in global PV installations directly drove silver consumption. The report shows that global new PV installations reached 280 GW in H1 2026, up 35% year-on-year, driving silver usage in solar to exceed 210 million ounces, accounting for 36% of total industrial demand.
\nMeanwhile, the comprehensive rollout of 5G communication infrastructure has also injected new momentum into silver demand. Silver offers irreplaceable electrical and thermal conductivity in components such as RF filters and circuit board connectors. With expanding 5G base station coverage and upgrades of terminal equipment, 5G-related silver usage reached 80 million ounces in H1 2026, up 28% year-on-year. Additionally, other emerging fields such as electric vehicle electronics and smart home sensors contributed a combined incremental demand of 60 million ounces.
\n\nSupply Side Pressure: Slowing Mine Production Growth
\nIn contrast to robust demand, silver supply faces notable bottlenecks. Major silver-producing countries — Mexico, Peru, and China — produced a combined 450 million ounces of mined silver in H1, up only 1.3% year-on-year. This is due to declining ore grades, stricter environmental regulations, and rising labor costs at most mines. Among them, Mexico's Fresnillo mine saw output fall 4% year-on-year due to phased shutdowns for technological upgrades. Regarding recycled silver, H1 recovery volume was approximately 120 million ounces, flat year-on-year, insufficient to bridge the supply gap.
\nThe widening supply-demand gap is directly reflected in inventory changes. Data from the London Bullion Market Association (LBMA) shows that silver inventories fell to 320 million ounces in July after three consecutive months of decline, the lowest level since 2020. COMEX silver futures inventories also declined to 280 million ounces. Low inventories support spot premiums; the current backwardation of spot silver over futures reached $0.15 per ounce, a two-year high.
\n\nGold-to-Silver Ratio Declines: Expectations for Silver Catch-Up Increase
\nThe gold-to-silver ratio (gold price\/silver price) has fallen from 85:1 at the start of the year to the current 75:1, reflecting silver's relative strength. Historical data shows that when the ratio exceeds 80, silver often experiences mean reversion momentum. At 75, it remains higher than the long-term average of 70. Combined with surging industrial demand, market expectations for silver's catch-up rally are rising. Wang Cheng, an analyst at the Singapore Precious Metals and Traders Association (SMTA), said: \"If the Fed starts a rate-cutting cycle in September, declining real interest rates will boost both gold and silver investment demand, but silver's industrial attributes make it more resilient, and the gold-to-silver ratio could further fall to around 65.\"
\n\nInstitutional Views: Silver Price Forecasts Upgraded
\nSeveral investment banks have recently adjusted their silver price forecasts. Goldman Sachs' commodity research team raised its average H2 2026 silver price forecast from $28 to $32, citing \"higher-than-expected industrial demand growth combined with physical investment demand.\" Morgan Stanley emphasized that silver ETF holdings increased by 380 tonnes month-on-month in July, indicating accelerating fund inflows. Michael DiRienzo, Executive Director of the Silver Institute, said: \"We are witnessing a structural change in silver demand — not a short-term spike, but a lasting trend driven by energy transition and the digital economy.\"
\n\nRisk Factors and Outlook
\nDespite strong fundamentals, silver prices still face macroeconomic uncertainties. The Fed's July FOMC meeting is approaching, and the market is divided on whether it will signal rate cuts. If interest rates remain higher for longer than expected, a stronger dollar could temporarily pressure precious metals. Additionally, the shadow of slowing global economic growth has not dissipated; a decline in industrial demand could weigh on silver prices. However, most analysts believe that silver demand in solar and 5G sectors has policy rigidity and technological stickiness, and short-term fluctuations will not alter the long-term growth trajectory.
\nLooking ahead to H2, with limited new mine capacity and continuing demand growth, the silver market may enter a sustained destocking phase. Investors can focus on COMEX inventory changes, Indian silver import data, and U.S. inflation expectations. For Singapore investors, the silver futures contract launched by SGX provides a convenient hedging tool to help reduce volatility risk.
\n\nOverall, silver is at a convergence point of industrial demand explosion and enhanced financial attributes, highlighting its medium- to long-term allocation value. As gold prices fluctuate at high levels, silver's catch-up potential deserves close attention from precious metals investors.
