Silver prices shattered historical records on Wednesday, catapulting beyond $66 per ounce as a convergence of monetary, structural, and physical market forces created unprecedented momentum in precious metals trading. The white metal’s remarkable ascent—more than doubling in value throughout 2025—represents one of the most dramatic revaluations in modern commodity history.
The rally accelerated following weaker-than-anticipated U.S. employment data, which signaled a cooling labor market and strengthened expectations for additional interest rate cuts in 2026. Spot silver reached $66.52 per ounce during the session before settling at $66.30 by 9:25 PM UAE time, marking a 4% single-day increase according to Reuters data.
Market analysts identify three primary drivers behind silver’s extraordinary performance: critically constrained physical supplies, price-inelastic industrial demand, and policy-driven market dislocations. Ole Hansen, Head of Commodity Strategy at Saxo Bank, observed that silver has fundamentally resolved its long-standing identity crisis by simultaneously functioning as both a monetary metal and industrial commodity while facing severe supply limitations.
The rally originated from gold’s momentum earlier in the year, with the gold-silver ratio reaching above 105 in April—an extreme valuation gap that attracted both speculative and long-term investors. Once technical resistance levels collapsed beginning in August, momentum buying accelerated dramatically, transforming relative value opportunities into outright price discovery.
Beyond technical factors, broader macroeconomic conditions have strongly favored hard assets amid eroding confidence in fiat currencies. Persistent inflation pressures, expanding fiscal deficits, and debt sustainability concerns have driven robust central bank gold purchasing, with silver benefiting as a higher-beta, more accessible alternative.
India has emerged as a crucial source of incremental demand, driven primarily by retail investment and jewelry consumption rather than seasonal factors alone. Simultaneously, silver-backed ETFs have absorbed approximately 130 million ounces this year, increasing total holdings by 18% to roughly 844 million ounces—overwhelmingly led by retail participation while institutions predominantly favored gold.
Vijay Valecha, CIO at Century Financial, noted that physical markets remain extremely tight, with London lease rates elevated near 6%, Shanghai inventories at decade lows, and backwardation signaling immediate scarcity. Industrial demand linked to solar energy, electrification initiatives, data centers, and AI infrastructure continues to accelerate, reinforcing silver’s dual role in both financial and industrial applications.
Despite the powerful bullish momentum, analysts caution that the rally shows signs of overheating. Momentum indicators reside firmly in overbought territory, and historical patterns suggest such aggressive moves typically precede sharp, short-term corrections. Nevertheless, near-term extensions toward $70-75 per ounce remain plausible given persistent physical tightness and gold’s underlying strength. While volatility will likely continue, the fundamental case for silver’s structural bull market remains intact for now.