Silver spot prices are still fluctuating at high levels. London Silver reports $94.48 per ounce, down 0.42% intraday. After breaking the $90 historical threshold, market bullish and bearish opinions have become more divided. But don’t be fooled by short-term volatility—the long-term upward logic remains intact. The real issues are the imbalance of supply and demand and the simultaneous influence of financial attributes.

First, let’s talk about supply and demand. The tightness in silver is not driven by speculation but by genuine industrial demand combined with supply bottlenecks. The industrial gap is widening continuously. It is forecasted that by 2026, the global silver supply-demand gap will reach 203 million ounces, the highest in nearly a decade. Photovoltaics are major consumers of silver, accounting for 40% of industrial demand. This year, global new photovoltaic installations are expected to boost silver demand to 210 million ounces. Additionally, demand for silver is growing due to AI chip cooling and new energy vehicle batteries (such as Tesla’s 4680 high-energy-density design).

On the supply side, over 70% of silver is a byproduct of copper, lead, and zinc mining. Expanding production takes 5 to 10 years. Silver mine production is expected to decline by 0.6% in 2026, while recycled silver can only grow by 2.5%, which is insufficient to cover the demand gap. Coupled with the Fed’s easing rate hike expectations, the opportunity cost of holding silver decreases. The dollar’s credibility is also being questioned, leading to renewed emphasis on silver’s inflation hedge and store of value properties. Capital continues to flow in.

From a technical perspective, after breaking the $90 level, silver is consolidating at high levels. This area is also where bullish and bearish opinions are most divided.