Silver prices soared back above $80 on Wednesday, extending gains for the fourth consecutive day as the precious metal builds momentum toward its record high. The white metal gained 1.8% and has risen over 13% across the previous three sessions, demonstrating continued strength amid robust retail investor appetite and persistent supply constraints.

Four-Day Rally Builds Momentum

Silver increased 1.6% to hit $82.61 per ounce, marking the fourth consecutive day of gains. The metal is now building momentum toward its record high of $84.01 an ounce, which it achieved on December 29. This sustained rally represents a significant recovery from previous volatile trading sessions.

Strong Annual Performance and Market Drivers

Silver witnessed its strongest annual gain, rising 147% on increasing industrial and investor appetite. Retail investor appetite, especially in China, has been a key driver of silver's growth. The metal's spectacular rally has outpaced other precious metals, benefiting from both supply shortages and potential US import tariffs that are keeping significant supplies locked up in New York.

Gold Also Extends Gains

Meanwhile, gold extended Tuesday's gains with spot gold increasing 0.8% to hit $4,485.39 per ounce, after a 3% gain in the previous session. Gold edged 0.1% lower at $4,490.51 an ounce as of 8.41 am in Singapore, bringing rates closer to the record high of $4,549.71, which it hit on December 24. The bullion has risen over 4% in the last three sessions.

Market Outlook and Economic Factors

Traders are looking beyond geopolitical tensions to US economic data due this week, including the December jobs report due Friday. Fed Governor Stephen Miran indicated the US central bank would need to cut interest rates by more than a percentage point, arguing that monetary policy is restraining the economy. Three successive rate cuts last year provided tailwinds for precious metals, which don't pay interest.

Gold posted its best annual performance since 1979, hitting a series of record highs with support from central-bank buying and inflows to bullion-backed exchange-traded funds. Palladium and platinum also witnessed small gains in the current trading environment.

Silver markets have reached unprecedented territory with prices climbing to an all-time high of $83.62 per ounce, marking impressive gains of approximately 15% in 2026. The rally reflects a combination of constrained supply conditions, robust industrial demand, and supportive global macroeconomic factors that continue to drive the precious metal to historic levels.

Record Performance and Market Dynamics

The latest price surge builds upon previous records, with domestic Indian markets having recently touched ₹2,33,311 per kilogram. The sustained momentum demonstrates what analysts characterize as a structural market transformation driven by fundamental supply-demand imbalances rather than speculative trading.

Industrial Demand Drives Structural Support

Axis Securities highlights that silver remains well-supported by strong industrial consumption and improving investment flows. The brokerage emphasizes demand from solar power installations, electric vehicles, electronics manufacturing, and automotive components as key drivers maintaining market focus. Countries accelerating energy-transition plans have particularly bolstered consumption patterns, with India's push to expand solar capacity adding significant domestic demand.

The industrial applications underscore silver's evolving role as a critical component in clean energy infrastructure and technological advancement, supporting Kedia Advisory's characterization of silver as a vital digital-age metal.

Five-Year Supply Deficit Creates Structural Shortage

Data from the Silver Institute reveals that global silver markets have experienced a structural deficit for five consecutive years, with demand consistently outpacing supply. The supply situation faces additional constraints as approximately 70% of silver production comes as a by-product of other metals, limiting the industry's ability to respond quickly to higher prices.

Flat mine output, declining ore grades, and modest recycling flows have maintained availability constraints, while inventories in key markets including London, China, and the United States remain at multi-year lows. The situation has been further complicated by China's tighter export controls on silver, which could restrict global shipments from one of the world's largest producers.

Analyst Targets and Investment Outlook

Market analysts maintain constructive outlooks despite acknowledging potential volatility. Previous projections from Motilal Oswal included domestic targets of ₹2,46,000 per kilogram with buy-on-dips strategies, while Kedia Advisory has projected long-term targets reaching ₹3,00,000 per kilogram.

Investment demand has strengthened following a turnaround in silver ETF flows, with recent inflows offsetting earlier liquidation periods. Geopolitical uncertainty and elevated global debt levels have reinforced silver's appeal as both an industrial and precious metal.

Macro Support and Risk Considerations

A softer US dollar and expectations of future rate cuts have provided additional support for precious metals. Lower global yields typically improve the appeal of non-yielding assets like silver, while currency movements can amplify price movements in domestic markets.

Analysts from InCred Money and Tata Mutual Fund acknowledge that while short-term corrections cannot be ruled out, particularly amid profit-taking or changes in rate expectations, the broader trend remains anchored in demand-supply imbalances rather than speculative excess. The current performance reflects a market driven by industrial necessity, constrained supply, and supportive macro conditions.