Silver prices hit a historic high at Friday's U.S. market close, with year-to-date gains reaching a staggering 135%. Notably, an ounce of silver now trades significantly above the price of a barrel of crude oil—a rare occurrence outside the unprecedented negative oil price episode in April 2020. With silver stabilizing above $66, its total market capitalization has eclipsed that of Alphabet, the parent company of Google, making it the world’s fourth-largest asset by value.
Long dismissed as "gold’s poor cousin," silver is now enjoying its moment in the spotlight, outpacing gold’s rally and stunning commodity traders who had favored gold over silver. The surge reflects booming industrial demand and silver’s growing weight in global asset allocations. Bullish analysts argue that silver, as gold’s "sentiment amplifier," could attract even stronger inflows, with $100/oz appearing increasingly plausible.
**Drivers Behind Silver’s Rally** The explosive rally stems from a confluence of factors: 1. **Macro Expectations**: Weak U.S. data has bolstered bets on Fed rate cuts in 2026, lifting non-yielding assets like silver as real rates decline. 2. **Structural Tightness**: Deutsche Bank highlights acute industrial supply shortages and soaring lease rates, exacerbating physical-market squeezes. 3. **Industrial Demand Reset**: The World Silver Institute (WSI) cites AI data centers, electrification (including solar), and EVs as key demand pillars, with annual growth rates of 17%, 13%, and exponential expansion, respectively. By 2030, these sectors are projected to drive relentless industrial demand. 4. **AI Infrastructure Boom**: Silver’s superior conductivity, thermal management, and corrosion resistance make it indispensable for AI hardware, from Nvidia’s GPUs to Google’s TPUs. 2024 industrial demand hit a record 680.5M oz, fueled by AI applications like ChatGPT. 5. **Speculative Momentum**: Wall Street notes silver’s smaller market size amplifies volatility, with FOMO and momentum trading accelerating gains.
**$100 Silver: A Realistic Target?** While silver’s near-parabolic rise lacks the extreme velocity of 1980’s bubble, its role as gold’s "high-beta" counterpart keeps bulls optimistic. - BNP Paribas’ Philippe Gijsels sees Fed cuts and euphoria propelling silver toward $100 by late 2026. - First Majestic’s Keith Neumeyer has repeatedly endorsed triple-digit silver prices. - Solomon Global’s Paul Williams, who predicted $100 back at $50/oz, asserts that supply-demand imbalances and silver’s dual utility will sustain the bull market, with dips offering buying opportunities.
"Silver’s fundamentals grow stronger by the day," Williams wrote. "Any pullback is a pause, not a reversal."
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