Driven by multiple factors such as rising expectations of interest rate cuts by the Federal Reserve, intensified global supply constraints, and being included in the US key mineral list, silver prices surged above the $60 per ounce mark on Tuesday, reaching a historic high. Since the beginning of this year, silver has risen by nearly 110%, outperforming gold and platinum.

New York futures prices rose 4.4% to $60.97 per ounce, hitting a high of $61.06 per ounce during trading; The spot price rose 3.9% to $60.46 per ounce, and briefly touched $60.50 per ounce during trading.

As a comparison, although gold has also risen by 60% this year and broken through the $4200 mark, its increase is still inferior to silver, resulting in the gold silver ratio falling below 70 times, for the first time since July 2021.

The direct trigger for this round of market trend is the Federal Reserve's monetary policy meeting. The market is widely betting that the Federal Reserve will announce a 25 basis point rate cut at its meeting ending on Wednesday. The more critical structural driving force comes from the severe contraction of the supply side. In addition to the traditional supply-demand gap, the US Geological Survey added silver to its "key mineral" list last month, exacerbating market concerns about supply stability and triggering a wave of stockpiling.

Expectations of interest rate cuts combined with tight supply drive up silver prices

The job vacancy (JOLTS) data released overnight was slightly better than expected, leading to a slight decrease in the probability of the Federal Reserve cutting interest rates to 87.4%, but this did not hinder the upward trend of precious metals. The reduction in borrowing costs usually benefits non profitable precious metal assets, and investors are flocking to the market due to concerns about the debt levels and currency depreciation risks of major Western economies.

Although silver usually follows the trend of gold, its smaller market size makes it more volatile and more sensitive to changes in the US dollar exchange rate. For investors seeking reasonably priced safe haven assets, silver appears cheaper and more attractive compared to gold, which is already at historical highs.

In addition, supply shortage is becoming the core logic supporting silver prices. Apart from the influx of funds and hoarding effects caused by being listed on the US' key mineral 'list, the tension in the physical market has not yet eased.

According to Bloomberg observations, although the inflow of funds from London vaults eased the historic supply squeeze in October, other markets are facing severe supply constraints. At present, China's silver inventory is at a ten-year low.

The Silver Institute points out that due to limited production and continued increase in industrial and investment demand, it is expected that the silver market will experience an annual deficit for the fifth consecutive year in 2025. Ewa Manthey, a commodity strategist at ING, emphasized the "structural lack of elasticity" in silver supply: approximately 70-80% of global silver production is a byproduct of lead, zinc, copper, or gold mining. This means that unless the prices of major metals can also support higher production, even if silver prices soar, supply cannot rapidly expand.

Maria Smirnova, a senior portfolio manager at Sprott Asset Management, bluntly stated that unless the deficit problem is solved, silver prices "have only one way to go, and that is to rise".

Bob Haberkorn, Senior Market Strategist at RJO Futures, pointed out that the current trend in gold is partly attributed to the surge in silver. He expects silver to break through $70 per ounce in the first half of 2026, while gold is moving towards $5000.

Strong support from industrial demand

In addition to its financial attributes, silver's strong industrial attributes also provide solid bottom support. According to research by the Silver Institute, the booming development of solar energy, electric vehicles and their infrastructure, data centers, and artificial intelligence (AI) will continue to drive up industrial demand until 2030. Market analyst Fawad Razaqzada from City Index and FOREX.com stated that people expect strong industrial demand for silver in the coming years, which is a significant factor driving up silver prices.

In addition, silver plays a key role in the wider electrification process, grid upgrades, and hybrid and pure electric vehicles. Against the backdrop of these long-term structural benefits, combined with the loose policies of the Federal Reserve and geopolitical tensions, market views generally believe that silver is in a long-term bull market.

Driven by multiple factors such as rising expectations of interest rate cuts by the Federal Reserve, intensified global supply constraints, and being included in the US key mineral list, silver prices surged above the $60 per ounce mark on Tuesday, reaching a historic high. Since the beginning of this year, silver has risen by nearly 110%, outperforming gold and platinum.

New York futures prices rose 4.4% to $60.97 per ounce, hitting a high of $61.06 per ounce during trading; The spot price rose 3.9% to $60.46 per ounce, and briefly touched $60.50 per ounce during trading.

As a comparison, although gold has also risen by 60% this year and broken through the $4200 mark, its increase is still inferior to silver, resulting in the gold silver ratio falling below 70 times, for the first time since July 2021.

The direct trigger for this round of market trend is the Federal Reserve's monetary policy meeting. The market is widely betting that the Federal Reserve will announce a 25 basis point rate cut at its meeting ending on Wednesday. The more critical structural driving force comes from the severe contraction of the supply side. In addition to the traditional supply-demand gap, the US Geological Survey added silver to its "key mineral" list last month, exacerbating market concerns about supply stability and triggering a wave of stockpiling.

Expectations of interest rate cuts combined with tight supply drive up silver prices

The job vacancy (JOLTS) data released overnight was slightly better than expected, leading to a slight decrease in the probability of the Federal Reserve cutting interest rates to 87.4%, but this did not hinder the upward trend of precious metals. The reduction in borrowing costs usually benefits non profitable precious metal assets, and investors are flocking to the market due to concerns about the debt levels and currency depreciation risks of major Western economies.

Although silver usually follows the trend of gold, its smaller market size makes it more volatile and more sensitive to changes in the US dollar exchange rate. For investors seeking reasonably priced safe haven assets, silver appears cheaper and more attractive compared to gold, which is already at historical highs.

In addition, supply shortage is becoming the core logic supporting silver prices. Apart from the influx of funds and hoarding effects caused by being listed on the US' key mineral 'list, the tension in the physical market has not yet eased.

According to Bloomberg observations, although the inflow of funds from London vaults eased the historic supply squeeze in October, other markets are facing severe supply constraints. At present, China's silver inventory is at a ten-year low.

The Silver Institute points out that due to limited production and continued increase in industrial and investment demand, it is expected that the silver market will experience an annual deficit for the fifth consecutive year in 2025. Ewa Manthey, a commodity strategist at ING, emphasized the "structural lack of elasticity" in silver supply: approximately 70-80% of global silver production is a byproduct of lead, zinc, copper, or gold mining. This means that unless the prices of major metals can also support higher production, even if silver prices soar, supply cannot rapidly expand.

Maria Smirnova, a senior portfolio manager at Sprott Asset Management, bluntly stated that unless the deficit problem is solved, silver prices "have only one way to go, and that is to rise".

Bob Haberkorn, Senior Market Strategist at RJO Futures, pointed out that the current trend in gold is partly attributed to the surge in silver. He expects silver to break through $70 per ounce in the first half of 2026, while gold is moving towards $5000.

Strong support from industrial demand

In addition to its financial attributes, silver's strong industrial attributes also provide solid bottom support. According to research by the Silver Institute, the booming development of solar energy, electric vehicles and their infrastructure, data centers, and artificial intelligence (AI) will continue to drive up industrial demand until 2030. Market analyst Fawad Razaqzada from City Index and FOREX.com stated that people expect strong industrial demand for silver in the coming years, which is a significant factor driving up silver prices.

In addition, silver plays a key role in the wider electrification process, grid upgrades, and hybrid and pure electric vehicles. Against the backdrop of these long-term structural benefits, combined with the loose policies of the Federal Reserve and geopolitical tensions, market views generally believe that silver is in a long-term bull market.