Key Points
After soaring last year, silver prices have been zigzagging of late.
A supply-demand imbalance should continue to support silver's climb.
The massive AI buildout is a major driver of silver prices.
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The price of silver has been highly volatile this year. After a historic rally in 2025 that sent the price of the white metal from about $31 an ounce in January 2025 to $115 an ounce in January of this year, the price of silver plummeted over the first few weeks of February to under $74 an ounce. That's a drop of more than a third from its recent high.
Analysts attributed the sell-off to a drop in demand for silver at the higher price level, as well as investor nervousness about the AI boom, which had helped drive silver's price higher for a year. But the price of silver is climbing again. It's back near $88 an ounce as of Monday, Feb. 23.
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Why is it climbing again? And should you invest now?
Fundamentals for higher silver prices remain in place
Despite the recent dip, the fundamentals that drove silver dramatically higher over the past year remain largely in place: tight supply and strong demand.
As an excellent conductor (like copper), silver remains essential to the massive AI data center buildout. Whatever you might think of AI as an investment, there's no doubt that the spending on data centers will continue through 2025. So-called hyperscalers plan to spend at least $625 billion this year on AI infrastructure.
There's also other industrial demand for silver, including for solar technologies, electric vehicles, and electronics. Yet supply remains constrained. Silver mining output has not been able to keep up with demand in recent years.
Of course, the price of silver will remain volatile. It tends to be more volatile than gold because the market for it is smaller, so changing attitudes toward it can swing prices wildly.
I advised investors to buy silver when the price was at $80, and I still think it's a good investment at the current price -- certainly, a good hedge should stocks and other asset prices experience a pullback or correction.
If you do plan to invest in silver, the iShares Silver Trust (NYSEMKT: SLV) is a good way to go about it. The fund represents holdings of physical silver stored in vaults by JPMorgan Chase in New York and London. It currently has net assets of about $51 billion.
Image source: Getty Images.
Now, SLV has also rebounded. It touched a recent bottom around $67 in mid-February, and it's since climbed back to $79. JPMorgan forecasts the average price for silver to be $81 a share over the course of 2026 , but I see it rising higher due to the imbalance between supply and demand. The current price seems like a good entry point.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
