Silver edges towards £44.50 an ounce on AI and renewable energy demand

Silver approached $60 per troy ounce this week, roughly £44.50 at current exchange rates, as industrial demand from the artificial intelligence and renewable energy sectors continues to outpace supply. The Silver Institute projects a sixth consecutive annual market deficit for 2026, with demand exceeding mine output and recycling by approximately 46.3 million ounces.

Industrial uses now account for roughly 58 per cent of global silver consumption. Beyond solar panels and electric vehicles, a new major driver has emerged: data centres and AI infrastructure require silver in high volumes for circuitry and components. As generative AI adoption accelerates worldwide, this demand pressure is unlikely to ease soon.

The tight supply backdrop contrasts with silver's year to date performance. The metal has retreated roughly 52 per cent from its January all-time high of $121.62 per ounce, around £88 sterling at the time. Analysts remain bullish longer term. JPMorgan's base case forecast for 2026 is $81 per ounce, whilst the London Bullion Market Association consensus sits at $79.57, both substantially above current levels.

For UK buyers, the all-in cost remains paramount: spot price plus dealer premium, delivery charges, and the standard 20 per cent VAT on physical silver. Storage in an LBMA-approved allocated vault eliminates the VAT charge for those who prefer not to take physical possession. This is general information, not financial advice.