The country’s shift toward advanced, high-efficiency solar cells, which require higher silver content, has been a major factor in this increase.
Leading companies like Tata Power and Reliance Industries are expanding their solar energy production capacity, increasing demand. This increased demand is driving silver prices higher, as the metal’s excellent conductivity makes it a crucial part of solar technology.
Analysts expect continued upward pressure on silver prices from these sector trends, although price volatility and supply constraints remain key risks.
China’s stimulus is boosting silver, but industrial demand poses risks
China’s recent stimulus measures have contributed to a rise in silver prices, as these policies are expected to boost demand for industrial metals. Analysts from Saxo Bank and Citi predict that silver could outperform gold in the near term, with Citi predicting silver prices will reach $35 within three months and $38 within the next year.
However, concerns about weakening industrial demand in China, especially in the solar sector, could limit silver’s upside potential. Despite optimistic forecasts, sluggish growth in Chinese industrial production and potential consolidation in the solar energy sector could dampen silver’s near-term performance.
Analysts such as Julius Baer’s Carsten Menke warn that silver’s prospects increasingly depend on gold’s performance, making it crucial for investors to keep a close eye on broader market trends.