Exchange-traded silver prices have resumed their aggressive rise, coming very close to their historical highs. On Wednesday, November 12, December silver futures on the Comex exchange jumped 4.5%, reaching $53.02 per ounce (as of 18:50 Moscow time). This is the first time the $53 level has been surpassed since October 17.
Gold prices rose alongside silver: December Comex gold futures increased by 1.74% to $4,188 per ounce.
Drivers of Growth: Fed Expectations and Supply Deficit
The primary catalyst for the rise in precious metal prices has been expectations of monetary policy easing in the United States. Demand increased amid hopes that the potential end of the U.S. government shutdown and the resumption of economic data releases could push the Federal Reserve to lower interest rates as early as next month. Precious metals typically appreciate in low-interest-rate environments, as this reduces the appeal of the U.S. dollar and other interest-bearing assets.
A chronic supply deficit forms the fundamental basis of the silver market. According to an investment strategist, last year the deficit exceeded 30% of total demand, and current stockpiles may last only about three years.
The Role of Silver in Industry and Associated Risks
Silver is not only an investment asset but also a key industrial metal, which accounts for more than 60% of total demand. Its extensive use in the production of solar panels (photovoltaics) is one of the main demand drivers, which is growing rapidly due to the global shift to green energy.
Additional industrial applications of silver include:
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electrical and electronic contacts (due to its high conductivity),
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medicine (antibacterial coatings for instruments and dressings),
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automotive industry (electronics and switches),
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chemical industry (catalysts).
A key feature of silver production is that around 80% of it is obtained as a byproduct of mining other metals (copper, lead, zinc). Because of this, silver supply is relatively unresponsive to rising silver prices, which exacerbates the deficit.
Outlook and Forecasts
Since the beginning of the year, silver has already risen by about 79%. The previous record was set on October 17, when futures reached $53.76 per ounce before a correction followed.
Analysts at Kept note that demand for the metal is supported by increasing uncertainty in global markets (trade tariffs, geopolitics) as well as ongoing investment interest.
Forecasts:
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Analysts at The Silver Institute predict that the silver market will remain in deficit in 2025, marking the fifth consecutive year.
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The shortage is expected to amount to 187.6 million ounces, which is less than in 2024. This will result from industrial demand growth (especially in solar energy and electronics) and increased mining output, partially offset by declining demand for jewelry and silverware.
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If global conditions improve, the average price in 2026 could be around $42 per ounce, followed by a downward correction.
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If the deficit, global uncertainty, and trade wars persist, the average silver price in the coming years could reach around $50 per ounce.
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Despite the significant rise, silver seems to be undervalued and some experts forecast that prices may reach $60 as early as 2026.