Silver shot from roughly $30 an ounce at the start of 2025 to the high‑$60s and even low‑$70s by year‑end. Gold broke records above $4,400. Copper rallied dramatically, too. That rare, synchronized metals rally wasn’t a flash in the pan — it was the intersection of monetary shifts, industrial demand and strained supply chains. What happens next depends on which of those forces wins the tug‑of‑war.
One story, three markets
There are shared threads running through the rallies: a weakening dollar, central‑bank buying, and the expectation of lower real yields if major central banks ease policy in 2026. Those macro moves lift the price of non‑yielding assets like gold. But silver and copper bring an industrial twist.
Silver is a dual‑purpose metal — part precious hedge, part industrial consumable. Its price exploded in 2025 because investment flows (including ETF demand) collided with structural industrial consumption: solar panels, electric vehicles and an uptick in data‑center and AI hardware construction consume silver permanently. Copper’s story is almost purely industrial: electrification, grid upgrades and the wiring needs of EVs and data centers tightened an already underinvested supply chain. Together they created a feedback loop: investors spot rising industrial demand, pile in, and the thinner silver market amplifies every dollar of new demand.
What’s under the hood: supply, policy and geopolitics
Supply-side frictions mattered. Mining capex has lagged for years; permitting and disruptions in major producing countries tightened availability. On top of that, tariff moves and regional stockpiling pushed buyers to hoard physical metal or rebuild inventories — a classic short‑term squeeze.
Monetary policy drove sentiment. Expectations of Fed easing in 2026 and the prospect of lower real yields made gold more attractive as a store of value. If markets indeed price in rate cuts, that lowers the opportunity cost of holding non‑yielding metals and helps explain why precious metals surged in tandem with industrial ones.
Geopolitical uncertainty and central‑bank diversification away from dollar‑heavy reserves also added fuel. When official sectors scoop up gold, it narrows the margin for error in a market already running hot.
Scenario planning for 2026 — three plausible paths
1) The easing path (bull case). If the Fed trims rates modestly and global growth holds up, real yields fall and both safe‑haven and industrial demand stay strong. Under this scenario, consensus forecasts suggest gold could trade comfortably in the $4,300–$4,900 range over 2026, silver might average in the mid‑$60s to high‑$70s per ounce, and copper should remain elevated as electrification projects continue.
2) The stagflation risk (mixed outcome). Slower growth with persistently high inflation could split the market. Gold would likely remain a bedrock hedge, copper could wobble with weaker industrial activity, and silver — sitting between investment and industrial uses — would be highly volatile. Policy uncertainty would drive price swings rather than a steady trend.
3) The tightening reversal (bear case). If inflation cools faster than expected and central banks keep rates higher for longer, yields would rise. That makes yield‑bearing assets comparatively more attractive and can sap momentum from both gold and silver — particularly silver because its investment demand is more sentiment‑driven. Copper would suffer most if global manufacturing softens.
Why silver feels different from gold
Silver’s market is smaller and more sensitive to flow dynamics. A relatively modest increase in ETF inflows or industrial purchases can move the price sharply. That makes silver a higher‑beta play: bigger upside in a good year, deeper pullbacks when risk appetite fades. For investors, that means silver is useful as a tactical exposure if you can stomach volatility; gold is the steadier reserve.
Where AI and electrification fit in
A big reason industrial metals look structurally supported is the energy‑intense buildout of AI and electrification infrastructure. Data centers and processors don’t just need silicon and chips; they need power, cooling and heavy copper wiring, and in many applications silver plays a role too. For context on the scale and ambition behind tech firms’ infrastructure pushes, see projects like Google’s Project Suncatcher and recent model releases such as Microsoft MAI‑Image‑1 that underscore the industry’s growing compute appetite. Those efforts translate into persistent commodity demand rather than a one‑off spike.
For investors: questions to ask
- Do you expect central banks to ease in 2026? If yes, that favors precious metals. If not, beware of drawdowns.
- How long will supply constraints persist? Mining projects take years to ramp; shortfalls can keep prices elevated even if demand growth cools.
- What’s your time horizon and risk tolerance? Gold is the steadier reserve; silver can reward conviction but swings violently.
This rally looks less like a speculative blip and more like a structural rerating driven by monetary policy, industrial transformation and underinvestment in supply. That doesn’t mean prices march straight up — volatility will be part of the ride — but it does change the risk calculus for portfolios that have long underweighted commodities.