Silver Surges Past $79 as Supply Crisis and Industrial Demand Drive Historic Rally
On Monday, silver prices kept going up, trading around $79.90 per ounce, up 0.8% at the start of the market. A perfect storm of low supply
Quick overview
- Silver prices have surged to around $79.90 per ounce, driven by low supply, high industrial demand, and geopolitical tensions.
- The metal has increased approximately 190% from its 52-week low, with a significant rise of 18.08% last week during light trading volumes.
- A structural supply-demand imbalance is causing a shortage of over 300 million ounces of silver, prompting buyers to pay a premium for immediate delivery.
- Analysts predict that if current trends continue, silver could reach $100 per ounce in the coming months due to ongoing supply issues and rising industrial demand.
On Monday, silver prices kept going up, trading around $79.90 per ounce, up 0.8% at the start of the market. A perfect storm of low supply, high industrial demand, and geopolitical tensions is pushing the precious metal to record highs.
The white metal has had one of the best years in commodities markets, rising around 190% from its 52-week low of $27.55 per ounce. Last week, silver rose 18.08% to $79.31, with most of the gains happening during light trading volumes after Christmas when purchasers took advantage of all the offers that were available.
Silver’s Supply Crisis Fuels Rally
Analysts say that a structural imbalance between supply and demand is the main reason for silver’s unprecedented run, even if most people think it was caused by geopolitical worries and Federal Reserve policy. Right now, the world produces about 850 million ounces of silver each year, but it needs 1.16 billion ounces. This means there is a shortage of more than 300 million ounces.
Market expert Sycamore said, “The main reason for the late rise has been a severe structural supply-demand imbalance in silver, which has led to a rush for physical metal.” “Buyers are now paying a huge 7% more for immediate delivery than they would if they waited a year.”
The crisis has led to low stock levels around the world. Last month, Chinese warehouses connected to the Shanghai Futures Exchange had the least amount of silver since 2015. A lot of the silver that is easy to get is still in New York vaults while traders wait for the results of a U.S. Commerce Department investigation into critical mineral imports.
Industrial Demand Revolution
Samsung’s declaration about mass manufacture of solid-state batteries, which need silver as a key part, is a big reason why silver prices have gone up. These new batteries can fully charge cellphones in about 10 minutes and last for about 20 years. They could replace lithium-ion technology in many areas.
Anuj Gupta, the Director of Ya Wealth, thinks that Samsung’s change could raise the demand for silver by about 100 million ounces. Industrial use is growing at an unprecedented rate, along with rising needs from electric cars, solar panels, AI data centers, and electronics production.
The U.S. Geological Survey’s November 6 designation of silver as a crucial strategic metal has made investors even more interested. This shows that the government recognizes the metal’s important role in modern technology and national security for the long future.
XAG/USD Technical Analysis and Market Outlook
From a technical perspective, silver has broken cleanly above the $80.75-$81.80 per ounce resistance range on the Multi Commodity Exchange, opening upside targets toward $83.55-$87.00 per ounce. International spot prices show support levels at $73.50-$73.15 per ounce, with resistance at $74.40 and $74.80 per ounce.
Traders should, however, watch for possible closing price reversal top formations at current record levels. current patterns could mean that the market is overbought in the short term and needs to consolidate. The closing last week at $79.31 will be an important pivot point. Price movement around this level will show if momentum keeps up or profit-taking picks up speed.
James Hyerczyk, a market expert, says that investors should be careful with their positions and have clear exit strategy during the holidays when trading is light. This is because volatility can rise quickly when there aren’t many trades.
Broader Market Implications
Silver’s amazing success has pushed its total market value to $4.65 trillion, making it the second most valuable asset in the world for a short time, ahead of NVIDIA. The gold fell sharply by 5% after reaching $84 per ounce, but the fundamental factors that sustain prices are still very strong.
If current supply problems continue and industrial demand keeps growing, analysts say that silver could reach $100 per ounce in the next few months or years. A weaker U.S. dollar and safe-haven flows from rising tensions between the U.S. and Venezuela and more general geopolitical concern provide the market more support.
Long-term investors should expect sustained strength because of the underlying supply shortage and the fact that more and more businesses are using it. Short-term traders, on the other hand, should be ready for high volatility as the market processes recent gains.
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