Silver just broke another record. Here’s what’s driving the precious metal’s new price surge
Silver prices are hitting new all-time highs, with the precious metal extending last year’s landmark advance into 2026. U.S. spot silver gained 5.9% on Monday, pushing the price to $109.1. U.S. silver futures , meanwhile, surged 7.5% to top $108.8. The metal skyrocketed 150% in 2025, outflanking the record surge in gold. Silver’s central role in the manufacture of chips and batteries, coupled with its recent recognition by the U.S. Department of the Interior as a critical mineral, is helping maintain its momentum, according to Claudio Wewel, FX strategist at J. Safra Sarasin Sustainable Asset Management. Wewel noted how silver’s high conductivity, its key role in the semiconductor space, and fears it may be drawn into a potential tariff war have all placed supply-side risks firmly in focus among investors, which led to physical outflows from the London market and falling local silver reserves last year. XAG= 1M mountain U.S. spot silver. At the same, the asset’s role as a monetary metal is also gathering pace, he added. “Compared to other commodities, its cost of storage is low, and the metal has a long-standing record as a key material for minting coins,” Wewel said in a note Monday. He also pointed to its increasing popularity among lower-to-middle income buyers in emerging markets, who have been priced out of physical gold due to rising prices, and now see silver as a cheaper alternative. “Household demand has picked up in India and China. In Shanghai, buyers are paying a premium of around USD 10 on top of the London per-ounce price,” he added. ‘Uncharted territory’ Societe Generale Commodities Research highlighted exchange-traded funds (ETFs) as a key driver of silver prices since last year. SocGen analysts said ETFs have dominated price action for both gold and silver since October, though central bank purchasing may have begun to ease back. “Silver tends to experience fewer consistent weeks of positive inflows, but since October 2025 there have been 491 tons of net inflows — with total holdings now at 26,263 tons,” SocGen analysts said in a commentary Monday. @SI.1 1M mountain U.S. silver futures. “Since October 2025, the price sensitivity to ETF flows is measured at 13.6%, which explains roughly 65% of the 130% increase in silver prices since the start of October.” Nic Puckrin, investment analyst and co-founder of Coin Bureau, said both silver and gold have now entered “uncharted territory,” adding that the broader macro backdrop supports further momentum in both metals. “At this point, we’re likely to see retail FOMO kicking in, as investors who have missed out on the metals rally so far pile into the market,” Puckrin said in a note, pinpointing the AI boom as a key driver behind the “unprecedented” demand for silver. Looking ahead, Wewel sounded a note of caution on the current spike, suggesting that silver’s risk/return balance could falter if the current momentum derails. “While the physical supply deficit should support a high silver price level in the near term, we caution that silver usually experiences much larger drawdowns after an extended rally than gold, owing to its higher price volatility,” he added.
Source – CNBC
