Silver shoots for the stars! What’s driving the white metal’s stunning 260% rally

What an extraordinary run it has been for silver.

The sharp price surge has pushed the white metal back into the global spotlight.

Prices are trading near US$104 per ounce, after jumping more than 50% in the past month and 260% over the past year. A rare combination of geopolitical risk, industrial demand, and speculative momentum is driving silver sharply higher.

A perfect storm for precious metals

Silver’s surge is closely tied to the broader rally across precious metals. Gold has pushed to fresh all-time highs, and silver has followed, amplified by its smaller and less liquid market.

A major driver has been rising geopolitical risk. Escalating global tensions, renewed trade war fears, and ongoing instability across multiple regions have pushed investors back toward hard assets. At the same time, concerns about government debt levels and long-term currency weakness have strengthened the appeal of precious metals as a store of value.

Silver has also benefited from growing expectations that global central banks will eventually be forced to ease monetary policy, as markets look ahead to slower growth and softer inflation.

Industrial demand is adding fuel to the rally

Unlike gold, silver is not just a financial asset. It plays a key role in industrial applications, particularly in solar panels, electric vehicles, electronics, and data centres linked to artificial intelligence. Demand from these sectors continues to rise, even as mine supply struggles to keep up.

Supply has also been tight. The silver market has run in deficit for several years, with limited inventories and little new production coming online. As investment demand has picked up, that imbalance has become harder for the market to ignore.

Momentum and speculation take over

Speculative momentum has been another key driver behind silver’s sharp rise. Retail investors have piled into silver through coins, bars, and ETFs, driven by fear of missing out.

Technical signals also point to stretched positioning, with silver trading well above key averages. Some analysts warn a pullback could occur, but momentum remains firmly in control for now.

ASX silver stocks back in focus

With prices surging, ASX-listed silver explorers and producers are attracting renewed investor interest.

Silver Mines Ltd (ASX: SVL) is one of the better-known names in the ASX silver space. The company focuses on acquiring and developing quality silver projects, and its share price has rallied strongly in recent months alongside the broader silver price boom. Over the past year, Silver Mines’ stock performance has significantly outpaced key sectors, reflecting strong sentiment around silver’s outlook.

Another company worth watching is Andean Silver Ltd (ASX: ASL). This explorer and developer also benefits from elevated silver prices. Andean Silver’s share price has shown strong moves as the silver rally gathered pace, although, like many junior miners, it can be volatile and sensitive to silver price swings.

What happens next?

While silver’s run has been extraordinary, analysts remain divided on what happens next. Some see continued upside as supply deficits deepen and industrial demand expands. Others warn that the rapid rise could lead to technical corrections, especially if speculative enthusiasm fades.

Despite differing views on where silver heads next, its surge above US$104 per ounce is making 2026 a standout year.

The post Silver shoots for the stars! What’s driving the white metal’s stunning 260% rally appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.