Silver Price Explodes 8% to $85.00: Is the AI-Powered “Industrial Squeeze” Finally Here?
Silver is no longer just known as “gold’s restless cousin.” It has now become a key technology metal. Over the weekend...
Quick overview
- Silver prices surged 7.8% to $85.00, marking a significant recovery amid a sixth year of supply deficit.
- The demand for silver is driven by Nvidia's new 800V data centers, which require high-conductivity materials for thermal management and efficiency.
- First Majestic Silver reported rising mining costs but remains confident in maintaining dividends, indicating strong market sentiment.
- Technical analysis suggests that breaking key resistance levels could lead silver prices towards triple digits if demand continues to grow.
Silver is no longer just known as “gold’s restless cousin.” It has now become a key technology metal. Over the weekend, silver spot prices surged 7.8% to $85.00, recovering weeks of losses in one trading session.
While gold faces challenges from geopolitical factors, silver is benefiting from the AI infrastructure boom. Nvidia-backed data centers are using record amounts of high-conductivity metal, and with a supply deficit now in its sixth year, silver is currently the best-performing commodity.
The “Nvidia Factor”: Why 800V Data Centers Need Silver
The main reason for this weekend’s $6.00 price jump is a major change in AI hardware. As Nvidia’s new 800V High-Voltage Direct Current (HVDC) data centers get ready for a global rollout, demand for silver is now considered “price-inelastic.”
The Science of the Squeeze:
- Thermal Management: High-end AI processors such as the H200 produce a lot of heat. Silver-based thermal solutions are now required to keep systems from failing.
- Conductivity over Copper: At 800V, silver’s better resistance to oxidation and higher thermal conductivity give it an efficiency advantage over copper.
- The Double Loop: Big tech companies are building silver-heavy solar farms to power their silver-heavy AI chips, instead of relying on the grid. This creates a cycle of growing
SHFE Ultimatum: The Feb 28 Volatility Wall
Traders are also keeping a close eye on the Shanghai Futures Exchange (SHFE). New mandates require all non-hedged positions to be closed or converted by February 28, 2026.
This position squaring has caused sharp price swings during the Asian session. Margin requirements for silver on the SHFE were recently raised to 22%, pushing out smaller speculators and leaving only large institutional investors in control.
[[XAG/USD-graph]]
First Majestic Earnings: Mining Costs Hit Record Highs
On the supply side, the outlook is positive for prices but tough for miners. First Majestic Silver (AG) reported Q4 earnings this week, beating EPS estimates but warning that All-In Sustaining Costs (AISC) are expected to reach $26.15 to $27.91 per ounce in 2026.
Why this matters for your trade:
- Production Floor: Mining costs are up 25% compared to last year. If prices fall below $70.00, many mines would likely close, quickly reducing supply.
- Dividend Signal: Even with higher costs, First Majestic doubled its dividend policy to 2% of revenue. This shows strong confidence that silver prices will stay above $80.00.
Technical Analysis: Breaking the “February Curse”
After falling 20% from January’s $118 peak, silver has started to recover. The 2-hour chart shows that prices have broken above the downward trendline that has limited gains since late January.
Key Technical Levels:
- Immediate Resistance: $86.34. If silver closes above this level for four hours, it could move up to the $92.31 Fibonacci extension.
- The “Golden Cross”: The price has moved back above both the 50-EMA ($79.20) and the 200-EMA ($82.00), which is a classic buy signal for trend-following strategies.
- Support Base: The $82.00 level, which was previously resistance, is now the main support zone for the upcoming week.
Key Support and Resistance for Feb 23–27
| Level | Type | Significance |
| $92.31 | Resistance | The major hurdle before a retest of the $100 psychological level. |
| $86.34 | Pivot | Breaking this level confirms the end of the February correction. |
| $82.00 | Support | Critical base; bulls must defend this to maintain the breakout. |
Trade Idea: Riding the Momentum
With silver facing a sixth straight year of supply deficit (about 67 million ounces expected in 2026), most traders still prefer to buy on price dips.
- Strategy: Buy above $85.20
- Target: $86.34 (First TP) | $92.31 (Second TP)
- Stop Loss: Below $79.22
Final Outlook: Silver is now seen as a strategic tech metal. As long as demand from AI stays strong and SHFE supply is tight, downside risk is limited and prices could still reach triple digits.
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