Silver extended its historic rally this week, reaching a new all-time high near 64.20 dollars per ounce, supported by exceptional strength in both industrial and investment demand. The metal is now in its fifth consecutive year of a structural supply deficit, according to the World Silver Survey 2025. This remains one of the strongest long-term bullish factors for the market.
- Global mine production is effectively flat at 813 million ounces per year, while recycling has not increased enough to offset rising consumption. This persistent imbalance is a key reason prices continue to trend higher.
- Industrial demand is surging across electronics, photovoltaics, green energy, and advanced manufacturing. The Silver Institute reports that industrial fabrication reached a record in 2025.
- Investor participation has intensified as real yields fall and monetary conditions ease. ETF inflows turned positive, with silver outperforming gold and nearly doubling year-to-date.
- Analysts are becoming increasingly optimistic. Bank of America raised its 12-month price target to USD 65 (which would imply no upside from current levels), but BNP Paribas argues that silver could reach USD 100 per ounce by the end of 2026, driven by persistent supply deficits and safe-haven demand.
- Structural constraints limit the market’s ability to respond with new supply. Because most silver is produced as a by-product of lead, zinc, copper, and gold mines, higher prices do not translate into immediate production growth.
- Key risks include potential thrifting in the solar sector, substitution in industrial applications, and a possible decline in investor demand if macro conditions shift, particularly if real rates rise.
The Federal Reserve’s latest decision added visible support to the precious metals complex. A third consecutive 25 basis point rate cut and the announcement of 40 billion dollars per month in T-bill purchases pushed the US dollar lower and boosted both gold and silver. Silver remains the standout performer among precious metals, benefiting from a combination of tightening physical fundamentals, supportive monetary policy, and strong broad-based demand drivers. The market enters 2026 with one of the most compelling bullish setups seen in more than a decade, although volatility is likely as prices test higher ranges.
Silver (D1 interval)
Looking on the silver chart we can see, that the price is almost 50% higher than EMA200, which is very similar to dynamic from 20 October; also the sharp move after November correction is almost 1:1 similiar to the previous one. This dynamic may increase silver volatility, however given the Fed policy change and solid demand, silver is entering Christmas and New Year period in a very optimistic mood. The breakout above 60 dollars per ounce on December 9 triggered additional momentum.
Source: xStation5
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