On July 30, 2026, the international silver market reached a milestone moment—spot silver prices broke through the $40 per ounce mark, hitting a high of $40.85, a nearly decade high since 2016. At the same time, the gold-silver ratio fell to 65.2, one of the lowest levels in history. This series of market movements has drawn global investor attention, particularly significantly impacting capital flows into ASEAN region silver ETFs.
Silver's Strong Breakout: Dual Drivers of Industrial Demand and Green Energy
The core driver of this round of silver's rise comes from the explosive growth of industrial demand. According to the latest data from the International Silver Association, global industrial demand for silver grew 18% year-on-year in the first half of 2026, with demand from the photovoltaic sector surging 35%, surpassing electronics and electricals to become the largest industrial consumer of silver. Driven by global carbon neutrality goals, new global photovoltaic installations are expected to exceed 600 GW in 2026, a 25% increase from 2025, directly boosting demand for photovoltaic silver paste.
In addition, emerging sectors such as new energy vehicles, 5G base stations, and AI servers also generate sustained demand for silver. Silver's unique electrical and thermal conductivity makes it irreplaceable in components like RF chips and high-end connectors. Industry analysts point out that the global industrial silver deficit is expected to reach 4,500 tons in 2026, the highest in nearly 20 years, and the supply-demand tightness is difficult to ease in the short term.
Gold-Silver Ratio at Historic Low: What Signal Does It Send?
The gold-silver ratio refers to the number of ounces of silver that can be exchanged for one ounce of gold, historically fluctuating in the 60-80 range. When the ratio falls below 60, it is generally considered that silver is undervalued relative to gold. The current level of 65, while not breaking the extreme, is the lowest since 2011. Looking back, the gold-silver ratio surged to 125 during the early stages of the pandemic in 2020, then began a six-year decline cycle, precisely reflecting silver's transition from a 'safe haven' to an 'industrial' asset.
Notably, this time the gold-silver ratio broke below the 70 level not due to a sharp drop in gold, but because of silver's active strength. During the same period, gold prices remained around $2,450 per ounce, with an annual gain of about 12%, while silver gained as much as 38%. Market funds are flowing from gold ETFs to silver ETFs, and the rotation logic within precious metals is playing out.
Surge in Silver ETF Inflows in ASEAN Markets
Driven by international trends, silver ETF products on ASEAN exchanges recorded record fund inflows. Taking the silver ETF listed on the Stock Exchange of Thailand (SET) as an example, net subscriptions in the last week of July reached 3.5 billion Thai baht, an increase of 220% from the previous month. The open interest in silver futures and ETFs on the Singapore Exchange (SGX) also hit new historical highs.
Industry analysis notes that ASEAN countries, as globally important electronics manufacturing and photovoltaic production bases, are more sensitive to industrial demand for silver. Local investors participate in silver price appreciation through ETF channels, enjoying capital gains while avoiding logistics costs of physical delivery. Data from the Thai Precious Metal ETF Investment Network show that the management fee for Thai-produced silver ETFs has dropped from 0.5% to 0.35%, further attracting retail funds.
Investment Strategies: How to Seize the Silver Rally?
In the face of silver's strong performance, investors need to focus on the following dimensions:
- Supply and Demand Fundamentals: Pay attention to changes in global silver mine production, especially labor disputes and environmental policies in major producing countries such as Mexico and Peru. In 2026, declining ore grades at some mines led to a slight drop in output, exacerbating supply tightness.
- Macroeconomic Environment: The Fed's interest rate policy remains a key variable. Although the Fed kept rates unchanged in July, market expectations for a rate cut in September have risen to 70%, and falling real interest rates benefit precious metals. With its industrial attributes, silver typically outperforms gold in the early stages of an economic recovery.
- Gold-Silver Ratio Strategy: With the gold-silver ratio at a historic low, consider a long gold-silver ratio arbitrage strategy (sell silver, buy gold), but be wary of risks from unexpected silver industrial demand.
- ETF Selection: ASEAN investors can focus on ETFs tracking the LBMA Silver Price Index, such as the Thai Silver ETF (ticker: SILVER-T), which offers good liquidity and tax advantages. Long-term allocators are advised to use a dollar-cost averaging approach to smooth volatility.
Outlook: Room After $40
Several international investment banks have raised their average silver price forecasts for 2026. Goldman Sachs, in a July 29 report, raised its year-end target from $42 to $48, citing seasonal peak in photovoltaic silver usage in the second half. JPMorgan noted that if the global economy falls into recession, silver may come under pressure due to declining industrial demand, but current green energy investment provides long-term structural support for silver demand, making pullbacks a buying opportunity.
Technically, silver faces strong resistance near $40, and there may be short-term profit-taking. However, the weekly MACD indicator shows a bullish crossover, and the monthly candlestick forms three consecutive bullish candles, indicating a sound medium-to-long-term uptrend. Support is at $38. If a pullback confirms the breakout, the next target is the $42-45 range.
In summary, the silver market is undergoing a structural bull market driven by industrial demand, and the historic low in the gold-silver ratio suggests investors need to adjust the traditional 'gold-first' mindset. For ASEAN investors, participating in the value revaluation brought by global supply chain transformation through silver ETFs may be a long-term strategy worth attention.
