Reasons Silver is Expected to Perform Better than Gold in 2026

Silver’s impressive 145% return in 2025 overshadowed gold’s 64% gain. That trend continued into early 2026, where silver posted a 25% return over just two weeks, while gold only saw a 6% increase. So, why do we believe silver will keep outperforming gold throughout 2026 and possibly longer? There are three key reasons.

1. Interest rates could keep decreasing

The U.S. Federal Reserve reduced interest rates three times in 2025, and there’s more than a 60% chance they might cut rates again by June.

Lower interest rates tend to boost precious metal prices. This is primarily because it mitigates one major downside of owning gold and silver: their lack of yields, unlike stocks that pay dividends or bonds. When yields are low, gold and silver seem a lot more appealing than during a high-interest environment.

2. Growing industrial demand for silver

There’s a reason well-known investor Warren Buffett has purchased vast amounts of silver over his lifetime, even if he once criticized gold as merely speculative, a form of investment that “produces nothing but hopes someone will pay you more for it later.”

Silver’s status as the most conductive metal on the periodic table lends itself to various industrial applications, including electric cars, solar technology, semiconductors, and consumer electronics like mobile phones and televisions.

A solar panel usually contains about 20 grams—or two-thirds of an ounce—of silver. With many countries pushing for greener energy, the demand for solar systems is rapidly increasing, significantly driving silver’s usage.

The forecast for U.S. solar capacity suggests an increase of 70 gigawatts by 2026 and 2027, which translates to a 49% rise from late 2025. Just to visualize, one gigawatt requires around 3.1 million solar panels. So, this expansion will lead to an estimated need for 143 million more ounces of silver.

And that’s just the U.S. On a global scale, in the first half of 2025, China set up more solar panels than the rest of the world combined. It’s not hard to see hundreds of millions of additional ounces of silver demand emerging in 2026 solely from these installations.

But can supply keep pace with this growing demand? Not necessarily.

3. Silver is primarily a by-product metal

While there are some silver mines, most silver comes from mines that mainly extract other minerals, such as gold, lead, or zinc.

For instance, in 2023, the U.S. had only four dedicated silver mines and 31 others that produced it as a by-product. As Buffett noted, silver’s by-product status affects its supply. Unlike a faucet, silver’s supply can’t easily be turned on. When Buffett last invested in silver in 1998, he observed that the production of by-product metals isn’t as responsive to price shifts.

Indeed, global silver production is expected to rise just 1% in 2024 and 2% in 2025 once all figures are finalized. On the other hand, new gold mines will commence operations in 2026, with gold companies increasing their output in response to higher prices. For example, Equinox Gold anticipates an 80% boost in its Canadian gold production.

Silver investment made simple

The iShares Silver Trust (SLV +3.92%) is an exchange-traded fund that closely follows silver’s performance and has already seen a substantial increase of 25% since the beginning of 2026. Given the current market forces at play, particularly with growing geopolitical tensions, there could be even more upside for silver in the near future.

With a low expense ratio of 0.5%—below the industry average of 0.82%—the iShares Silver Trust may be an attractive option for investors who prefer not dealing with physical silver or the risks associated with specific mining stocks.