Silver Prices Slip After Fed‑Driven Surge, Inflation Hedge Debate Continues

Silver rallied nearly 150 % in 2025, hitting a record $121.64 per troy ounce on 29 January 2026 before falling about 27 % the next day as markets anticipated a more hawkish stance from new Federal Reserve Chair Kevin Warsh. The metal is now trading around $60 per ounce, roughly 50 % below its January peak and close to an 11‑month low.

Around 60 % of silver demand is industrial, supporting uses in solar panels, AI data‑center chips, electric vehicles and more. A persistent supply deficit – now in its sixth year – keeps pressure on prices, although some solar manufacturers are cutting silver use, with one pledging to switch entirely to copper. Analysts expect modest upside; J.P. Morgan projects silver to finish 2026 near $80 per ounce.

Investors view silver as a dual‑purpose asset, offering inflation‑hedge potential while also benefitting from industrial demand. As one adviser put it, “If you’re worried about increased inflation, adding precious metals like silver to your portfolio can be a smart choice.” However, advisors caution that silver is volatile and should form only a small tactical allocation alongside gold, TIPS and cash‑like yields.