Silver dips to around £42 an ounce in July as solar thrifting weighs on demand

Silver has pulled back sharply over the past few weeks, with the spot price in sterling sitting at around £42 per troy ounce, or approximately £1.35 per gram. That is down from £45.68 at the start of July and, in US dollar terms, the metal fell from around $70 per ounce in mid-June to approximately $57 by mid-July, a fall of roughly 18%.

The main pressure is a slowdown in industrial demand. Solar panel manufacturers have been cutting the amount of silver used in each module, a process known as thrifting, as high prices push them towards alternative materials. Global photovoltaic silver consumption has fallen sharply as a result, and overall industrial demand is forecast to drop around 3% for 2026.

The structural supply picture remains tight, however. Analysts project 2026 will be the sixth consecutive year in which global demand exceeds mine output and recycling supply combined, with a deficit of roughly 46 million ounces expected.

UK buyers also need to account for VAT. Physical silver delivered in the UK attracts 20% at the standard rate, adding around £8 per ounce at current spot prices. All-in costs for a one-ounce coin or small bar are therefore likely to exceed £50 once dealer premiums are included. Allocated storage in an LBMA-approved vault avoids this charge for buyers who do not need physical possession.

This article is not financial advice.