Gold and Silver in 2026: The structural shift investors are missing

• Gold rose from about US$1,200/oz in 2016 to record highs above US$3,000/oz by 2025, but the bigger story is the “why” behind this jump in price: central banks bought more than 1,000 tonnes of gold in each of 2022, 2023 and 2024 (World Gold Council), the fastest sustained pace on record.
• Gold appears to be shifting from an inflation hedge to a strategic reserve asset, driven by reserve diversification after the 2022 freezing of Russian sovereign reserves.
• Silver is now an industrial metal first: roughly half of annual demand comes from solar, EVs, semiconductors and AI infrastructure (The Silver Institute).
• The silver market has run structural supply deficits for several consecutive years because about 70% of silver is mined as a by-product of copper, zinc, and lead.
• A new layer has emerged: tokenised gold (for example PAXG and Tether Gold) that now allows investors hold physically backed metal on the blockchain.

When investors look back at the decade from 2016 to 2026, the conversation around precious metals often begins with an extraordinary price rally. Gold rose from around US$1,200 per ounce in 2016 to successive record highs, crossing US$2,700 in 2024, moving above US$3,000 per ounce in 2025, and reaching US$5,400 per ounce in 2026. Silver also exceeded most expectations after years of trading in a narrow range. The decade fundamentally reshaped the role of both metals in the global economy.

Gold reclaimed its historical position as a strategic reserve asset, attracting sustained demand from central banks seeking to diversify reserves amid geopolitical uncertainty. Silver, meanwhile, followed a different trajectory. Rather than being driven primarily by investment demand, it became increasingly integral to the technologies powering the modern economy, including solar energy, electric vehicles, semiconductor manufacturing, and artificial intelligence infrastructure.

Understanding these structural shifts matters more than reading price charts. Markets rarely move in isolation. They reflect changes in economic policy, industrial development, geopolitical relationships and investor behaviour. The strong performance of gold and silver between 2016 and 2026 was ultimately the consequence of deeper transformations, not a single event or market cycle.

Gold has traditionally been viewed as a defensive asset that performs well during financial stress. That narrative remains partly true, but it does not fully explain the metal’s performance over the past decade.

The first major turning point came during the COVID-19 pandemic. Faced with an unprecedented global shutdown, governments introduced enormous fiscal stimulus while central banks cut interest rates to historic lows and expanded their balance sheets. Investors sought assets capable of preserving purchasing power in an environment of loose monetary policy, rising inflation expectations and heightened uncertainty. Gold responded as expected, reaching record highs above US$2,000 per ounce in 2020.

Many assumed the rally would fade once economies reopened, and rates began rising. Instead, gold showed remarkable resilience, revealing that inflation was only one part of a much larger story.

The real structural shift emerged after 2022, when the freezing of Russian sovereign reserves prompted governments and central banks to reassess how they manage national wealth. For decades, reserve assets such as US Treasury securities and foreign currencies used to be  treated as politically neutral stores of value. The sanctions showed that access to sovereign reserves could become subject to geopolitical developments, encouraging policymakers to reconsider the balance between financial efficiency and strategic independence.

Unlike foreign currency reserves, physical gold held in domestic vaults carries no direct counterparty risk. It does not depend on another country’s financial system, nor can it be created by central banks through monetary expansion. For institutions responsible for preserving national reserves over decades rather than quarters, these characteristics regained importance.

The Swiss National Bank (SNB) did not buy more gold, but bullion still appeared to transform the central bank’s balance sheet. The SNB’s holdings remained unchanged at 1,040 tonnes in 2025, yet the 45.9% rise in the gold price generated a CHF 36.3 billion valuation gain. That largely offset CHF 8.8 billion of losses on foreign-currency positions and contributed to a CHF 26.1 billion annual profit, allowing CHF 4 billion to be distributed to the Confederation and Cantons. Gold’s Swiss role was geared more towards shock absorption.

The scale of the response was historic. According to the World Gold Council, central banks added more than 1,000 tonnes of gold in 2022 (about 1,082 tonnes), again in 2023 and again in 2024, roughly double the annual average of the previous decade. Emerging economies, including China, Turkey and Poland, led much of the buying, steadily raising the share of bullion in their reserve portfolios. These were long-term strategic decisions aimed at strengthening monetary resilience, not short-term trades.

For years, analysts relied on a simple framework to explain gold prices. Lower interest rates supported the metal by reducing the opportunity cost of holding a non-yielding asset, while higher rates strengthened the US dollar and pressured bullion.

That relationship still matters, but the past decade showed it is no longer sufficient on its own. Gold kept attracting buyers even during aggressive monetary tightening in 2022 and 2023, suggesting investors were responding to broader structural risks rather than purely monetary conditions. Elevated government debt, persistent geopolitical tension, banking-sector stress in 2023 and record central bank purchases all sustained demand despite changing rate expectations.

In effect, gold seemed to evolve from an inflation hedge into an asset representing financial resilience. Inflation can rise or fall, yet concerns about sovereign debt sustainability, reserve diversification and geopolitical fragmentation tend to persist far longer. These structural themes increasingly appear to be driving capital flows and could help explain why gold stayed resilient even as traditional macro relationships weakened.

For much of financial history, silver was described as a more volatile version of gold, a precious metal whose fortunes mirrored bullion with bigger price swings. That description became progressively less accurate. Today, industrial applications account for roughly half of annual silver demand, and total industrial demand reached record levels in the mid-2020s according to The Silver Institute. Rather than functioning solely as an investment asset, silver has become a critical raw material for some of the fastest-growing industries in the world. Here’s why.

Silver has the highest electrical and thermal conductivity of any metal, making it very difficult to replace where efficiency and reliability are critical. As governments accelerated renewable energy investment and manufacturers scaled electric vehicles, advanced semiconductors and high-performance electronics, silver became an essential input across these supply chains.

Silver’s main industrial uses:

1. Solar panels (photovoltaic paste), which alone consume more than 200 million ounces per year
2. Electric vehicles (battery management, charging infrastructure, power electronics)
3. Semiconductors and high-performance electronics
4. AI data centres, processors and communications hardware
5. 5G equipment and medical devices

Solar energy is the clearest illustration. Every photovoltaic panel relies on silver paste to conduct electricity, and although manufacturers have reduced silver per cell over time, rapid growth in global installations has consistently outweighed those efficiency gains. A similar pattern appears in electric vehicles, where growing electronic complexity has expanded silver content across power systems.

Artificial intelligence has added another layer of demand. The rapid expansion of data centres, advanced processors and supporting infrastructure has increased the need for highly conductive materials that perform reliably under load. Silver is a small share of the total cost of these technologies, but its performance makes substitution difficult in many high-value applications. The result is a market increasingly shaped by structural industrial demand rather than pure investor sentiment.

Unlike gold, which is mined mainly for its own value, roughly 70% of the world’s silver is produced as a by-product of copper, zinc and lead mining. This creates a structural limitation many investors overlook. Even if silver prices rise sharply, miners cannot simply produce more silver unless the economics of the primary metals justify expanding operations.

This distinction became more important as industrial demand accelerated. While manufacturers needed more silver for renewable energy, EVs and electronics, mine supply was slow to respond. New mines often require years of exploration, environmental approvals, and capital investment before production begins, making supply inherently less flexible than demand.

Recycling has eased some pressure, but it is not an immediate fix. Solar panels, industrial equipment and consumer electronics typically stay in service for years or decades before reaching recycling. Much of the silver installed today will not return to the market until the 2040s or beyond.

The consequence has been a run of structural supply deficits. According to The Silver Institute, the silver market has recorded annual structural deficits every year since 2021, with cumulative shortfalls approaching 820 million ounces between 2021 and 2025. The 184.3 million ounce deficit recorded in 2023 was part of a deepening, multi-year imbalance that has steadily reduced above-ground inventories. Rather than a temporary mismatch between supply and demand, these deficits reflect a global economy consuming more silver than the market can readily replace.

One of the most useful metrics in precious metals is the gold/silver ratio, which measures how many ounces of silver it takes to buy one ounce of gold. Historically the ratio has averaged around 60:1, but it spiked to roughly 100:1 during the 2020 market shock, a level many analysts viewed as silver being deeply undervalued relative to gold. As silver’s industrial demand story strengthened through the decade, the ratio became a closely watched gauge of relative value between the two metals.

The ratio is important because it provides context beyond the price of either metal alone, helping investors assess whether gold or silver appears relatively expensive or inexpensive compared with its historical relationship. While it is not a predictor of future prices or a timing tool, unusually high or low readings can potentially help investors evaluate relative value .

A newer development sits at the intersection of precious metals and digital assets: tokenised gold. Products such as PAX Gold (PAXG) and Tether Gold (XAUT) represent ownership of physical gold, typically London Good Delivery bars held in professional vaults, recorded on a blockchain.

Tokenisation addresses several long-standing frictions in physical metal. It allows fractional ownership of a single bar, near-instant settlement, and transferability without shipping or insuring physical bullion. For a new generation of investors and institutions already operating on-chain, tokenised gold is likely to offer exposure to the same reserve asset central banks are accumulating, with the transparency and programmability of digital assets.

More broadly, tokenised gold is part of the wider real-world asset (RWA) trend, in which traditional stores of value are brought on-chain. As reserve diversification and monetary resilience become strategic priorities globally – the ability to hold verifiable, physically backed gold in digital form is likely to become an increasingly relevant part of the market.

Although both belong to the precious metals category, their investment characteristics have diverged.

Figure 1: Gold vs Silver, Key Investment Differences

Source: AMINA Bank

Gold’s primary role remains wealth preservation, reserve diversification and financial resilience, with demand shaped by central banks, institutions and macro conditions. Silver sits at the intersection of investment demand and industrial production, benefiting from investor sentiment as well as manufacturing, infrastructure and technological innovation. This is why silver often shows greater volatility: industrial demand can amplify moves in both directions, while gold responds more gradually. Rather than competing, the two metals increasingly serve complementary roles in diversified portfolios.

Central banks continue to treat reserve diversification as a strategic priority. Governments remain committed to expanding renewable energy. Artificial intelligence, electrification and advanced manufacturing are expected to remain major drivers of industrial demand, while long mine-development timelines suggest supply is likely to keep lagging demand in many cases. The geopolitical backdrop reinforces all of this: a more multipolar world places greater emphasis on supply-chain resilience, resource security and monetary independence, with implications well beyond precious metals. Increasingly, investors may evaluate gold and silver through the lens of long-term structural change rather than short cyclical swings.

The past decade was far more than a period of strong price appreciation. It marked a fundamental reassessment of why gold and silver matter in the modern global economy.

These trends suggest the precious metals market is increasingly driven by structural forces rather than short-term speculation. Investors, policymakers and manufacturers no longer view gold and silver through the same lens they did a decade ago. Whether the next decade delivers the same pace of price appreciation is uncertain. What appears far more likely is that the strategic relevance of both metals is likely to keep evolving, keeping them central to conversations about resilience, innovation and the future direction of the global economy.

What is driving silver demand in 2026?

Industrial use now accounts for roughly half of annual silver demand. Solar panels, electric vehicles, semiconductors and AI data centres all rely on silver’s exceptional conductivity, making industrial adoption the primary driver of demand rather than investment alone.

Is there really a silver supply shortage?

Yes. The silver market has run structural deficits for several consecutive years, including roughly 184 million ounces in 2023 (The Silver Institute). Because about 70% of silver is mined as a by-product of other metals, supply cannot easily rise to meet demand.

Gold vs silver: which is the better investment?

Both metals serve different roles. Gold favours wealth preservation and reserve diversification with lower volatility, while silver offers industrial-growth exposure with higher volatility. Many investors hold both as complementary assets rather than choosing one.

What is the gold/silver ratio and why does it matter?

The gold/silver ratio measures how many ounces of silver equal one ounce of gold. It has averaged around 60:1 historically but reached about 100:1 in 2020. Investors use it to gauge relative value between the two metals.

What is tokenized gold and is it backed by physical metal?

Tokenized gold, such as PAX Gold (PAXG) and Tether Gold (XAUT), represents ownership of physical gold held in professional vaults, recorded on a blockchain. Each token is backed by real boullion and allows fractional ownership and fast settlement.

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