On July 29, 2026, the international precious metals market underwent a structural shift: silver prices surged past $36 per ounce, hitting a new yearly high, while gold remained relatively stable, causing the gold-silver ratio (gold price / silver price) to rapidly contract from 85:1 in early July to 78:1, the lowest level this year. This trend reflects silver's unique role in the new energy revolution and the market's reassessment of industrial metal demand prospects.

Silver 'Breaking Loose': From Precious Metal to Industrial Metal

As of 17:00 Beijing time on July 29, spot silver was trading at $36.12 per ounce, up 1.8% on the day, with a year-to-date gain of 32%, significantly outperforming gold (up about 12% over the same period). Silver's strong performance is driven by two factors: its traditional safe-haven attributes and its increasingly prominent industrial demand. According to the latest data from the World Silver Institute, global industrial demand for silver grew 7.5% year-on-year in the first half of 2026, with silver usage in photovoltaic cells up 15% and in electric vehicles and charging infrastructure up 21%.

"Silver is shifting from a traditional precious metal role to a 'green metal,'" said Li Wei, chief analyst at Silver Insight, a precious metals research firm based in Singapore. "As countries step up carbon neutrality policies, photovoltaic installations and new energy vehicle penetration continue to rise. Silver, as a key material with excellent conductivity and reflectivity, has much greater demand elasticity than gold."

Gold-Silver Ratio Anomaly: Silver's 'Catch-Up Game' Accelerates

The gold-silver ratio is a core indicator for measuring silver's relative valuation against gold, with a historical average of about 60:1 to 70:1. In the first half of this year, the ratio remained above 85:1, far above the average, suggesting silver was undervalued. In July, silver rapidly caught up, pushing the ratio below 80. Technically, 78:1 is still above the long-term average, and analysts believe silver still has upside potential, possibly challenging the 2020 high of $49 per ounce.

"The contraction of the gold-silver ratio often signals a recovery in market risk appetite and the start of an industrial cycle," noted Zhang Hua, a precious metals trader at Bank of China. "Currently, expectations of Fed rate cuts are rising, real interest rates are falling, providing financial support for silver. At the same time, the global manufacturing PMI is rebounding, especially in Southeast Asia, which boosts future industrial demand for silver."

Southeast Asian Market: Demand Surges, Investment Heats Up

In Southeast Asia, silver is becoming a new investment hotspot. Data from the Ho Chi Minh City Gold and Silver Exchange shows silver trading volume in July surged 35% month-on-month, and sales of silver investment bars and coins rose 40%. The Thai Jewelers Association said local silver jewelry demand has also increased significantly, with some consumers shifting from buying gold to buying silver. Analysts at Singapore's MarketPulse believe that the expansion of Southeast Asia's middle class, manufacturing relocation, and photovoltaic industry layout are making the region one of the fastest-growing areas for global silver demand.

Real-time quotes on the VNGOLD platform show that on July 29, the retail price of silver (including processing fees) in major Southeast Asian markets was $4.2-$4.5 per gram, up about 5% from the beginning of the month. Gold retail price was $68-$70 per gram, and the gold-silver ratio at the retail level has fallen to around 15:1 (due to different processing premiums), reminding investors to be aware of liquidity discounts on physical silver.

Outlook: Tight Supply-Demand Balance, Focus on the Fed

On supply-demand fundamentals, global silver has experienced a structural deficit for the fourth consecutive year. The World Silver Institute expects the global silver gap to reach 5,000 tons in 2026, with inventories falling to decade lows. On the supply side, production growth is sluggish in major silver mines in Mexico and Peru due to declining grades and tighter environmental policies. On the demand side, in addition to solar energy and electric vehicles, 5G infrastructure and AI chips are also creating new demand for silver.

In the short term, the market is focusing on the Fed's upcoming interest rate decision. If the Fed cuts rates as expected, silver could break through $40 per ounce. If it remains hawkish, it may pull back to the $34-$35 range. However, in the long run, silver's 'industrial attributes' are giving it greater elasticity than gold, and investors should closely monitor global photovoltaic installations and new energy vehicle sales data.

Overall, silver's new yearly high is not just a structural event in the precious metals market, but also reflects the profound logic of the global economy's transition to low carbon. For Southeast Asian investors, silver's allocation value is now prominent, but they should be wary of short-term volatility and the risk of chasing highs.