Silver is the metal of the future amid investment boom; crude oil oversupply limits upside: Analysts

Silver is emerging as the star performer among precious metals, even as crude oil struggles with oversupply, say analysts.

Prices of silver have surged past $70 an ounce this year, up nearly 140% since January, while gold has hit record highs near $4,500, marking its strongest annual gain since 1979. In India, silver has climbed above ₹2,15,000 per kilogram.

Michael DiRienzo, President and CEO of The Silver Institute, told CNBC-TV18, “It’s been a remarkable year for silver, and we don’t think this is going to end anytime soon. Quite frankly, when you look at the five factors, you can start with the debasement of the dollar—this is very much a debasement trade.” He added that geopolitical tensions, tariff uncertainties, and shifting investment cycles are also driving strong demand for the metal.

DiRienzo highlighted silver’s growing role in technology and industry, saying, “Silver, beyond its role in the energy transition, is increasingly being used in AI, data centres, and the chips that power these data centres. This is a new technological cycle, much like what we saw with solar panels in 2009 and 2010.” He expects continued investment inflows, with exchange-traded products projected to absorb over 200 million ounces of silver this year.

The Silver Institute estimates the global silver deficit at 95 to 100 million ounces, a level that underscores the strength of fundamentals.

“If you look at the last five years of deficits and add them up, it equals almost one year of mine supply coming to the market,” DiRienzo noted. Mine supply is expected to remain flat, with no major new projects on the horizon, suggesting the deficit could persist into 2026 and 2027.

Meanwhile, crude oil remains under pressure despite geopolitical tensions. Bob Yawger, Executive Director and Commodity Specialist at Mizuho Americas, said, “Venezuelan production is about 900,000 barrels a day, which is insignificant compared to the surplus floating around the planet. Even if Venezuelan supply were removed entirely, we would still have excess supply putting pressure on prices.”

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With global crude supply exceeding demand by around 3.8 million barrels a day, Yawger expects Brent crude could dip into the low $50s, and US crude into the $40s, unless OPEC implements production cuts.

“If Brent crude trades below $50, OPEC will likely start taking barrels off the market,” he said, noting that record-high US production and rising output from countries such as Brazil, Canada, Mexico, and Guyana are adding to oversupply.

While energy markets face headwinds, silver’s combination of industrial demand, investment interest, and tight inventories positions it as a key metal of the future. Investors appear increasingly willing to diversify their portfolios into hard assets, signalling that the rally in precious metals could continue well into 2026.

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