Silver Surges Past $61.70 as Solar Demand Drives Historic Supply Deficit

Silver climbed $1.72 to $61.70 USD/oz ($87.86 CAD/oz) on Monday, October 5, 2026, outpacing gold’s 0.52% gain with a powerful 2.87% daily move. The white metal has now advanced more than 34% year-to-date, fuelled by a combustible mix of monetary safe-haven demand and relentless industrial consumption that the mining industry is struggling to keep pace with.

The Gold/Silver Ratio Signals Room to Run

With gold fixed at $4,184.00/oz, the gold/silver ratio now sits at approximately 67.8 — down sharply from above 90 in early 2024, but still historically elevated relative to the long-term average near 60. Many technical analysts interpret a ratio above 65 as silver being undervalued relative to gold, suggesting the white metal has further upside if the broader precious metals bull market continues. A reversion to a 60:1 ratio at current gold prices would imply a silver price of roughly $69.73 USD/oz ($99.30 CAD/oz) — a level that would represent new all-time highs.

Solar Panels and EVs: Industrial Demand Is the Structural Story

According to the Silver Institute’s most recent supply-demand report, global silver demand reached a record 1.46 billion ounces in 2025, driven overwhelmingly by photovoltaic (PV) solar panel manufacturing and electric vehicle battery systems. Solar alone consumed an estimated 232 million ounces — nearly 16% of total demand — as governments from Canada to China accelerated renewable energy buildouts. The electronics sector added another 390 million ounces, spanning everything from semiconductors to EV power management systems. Mine supply, by contrast, grew just 1.2% in 2025 to approximately 843 million ounces, leaving a structural supply deficit of roughly 265 million ounces for the second consecutive year.

First Majestic Silver: A Canadian Play on the Deficit

Among Canadian-listed silver producers, First Majestic Silver Corp. (TSX: FR) remains the highest-profile pure-play. The Vancouver-based miner operates multiple producing assets in Mexico and the United States, including the Jerritt Canyon gold-silver complex in Nevada. First Majestic has benefitted directly from silver’s 2026 rally, with its shares outperforming the broader TSX Materials Index year-to-date. The company’s cost structure — with all-in sustaining costs (AISC) reported near $18.50 USD/oz in its most recent quarter — means the current spot price of $61.70 represents a cash margin of over $43 USD per ounce, a level that could drive significant free cash flow upgrades when Q3 2026 results are reported. Peer Pan American Silver (TSX: PAAS) and developer MAG Silver (TSX: MAG), with its high-grade Juanicipio mine in Mexico, round out the Canadian silver investment landscape.

Supply Disruptions Add Urgency to the Deficit Narrative

Mine supply headwinds are compounding the structural gap. Labour disputes at several major Mexican operations — Mexico accounts for roughly 25% of global primary silver production — have intermittently reduced output in 2026. Water scarcity in Peru, the world’s second-largest silver-producing nation, has forced temporary curtailments at multiple operations. These disruptions have prevented secondary and scrap supply from fully offsetting the shortfall. Above-ground silver inventories tracked on the COMEX and London Bullion Market Association (LBMA) have declined for 18 consecutive months as of September 2026.

With the gold/silver ratio still above its long-run average, a deepening physical deficit, and Canadian producers generating extraordinary margins at spot prices, silver’s dual identity as both monetary hedge and critical industrial input is increasingly acting as a double tailwind rather than a source of volatility. Retail and institutional investors alike are taking notice — and today’s 2.87% session gain suggests the move is far from over.