Silver Soars Past $100: Demand, Deficits, and a Global Squeeze

Silver Breaks $100, Surges to Record $110: What’s Driving the Silver Shockwave?

Silver has shattered the $100-per-ounce barrier for the first time in history, climbing to a record $110.13 in European trading on Monday. This remarkable rally has stunned investors and ignited a global conversation about the changing dynamics of the silver market. Once seen as gold’s more modest cousin, silver is now the star of 2026’s commodity boom — and the story behind it reveals deep structural shifts in global supply, industrial demand, and financial markets.

The Historic Silver Rally

Since early 2025, silver’s trajectory has been nothing short of astronomical. From around $33 per ounce in May 2025 to over $110 today, prices have more than tripled in less than a year. Analysts describe this surge not as a speculative bubble but as a manifestation of real supply shortages and surging industrial use.

Key drivers behind the surge:

A global supply squeeze caused by dwindling inventories.
Record industrial demand in renewable energy and technology sectors.
Growing investor interest amid inflation and weakening fiat currencies.

Supply Squeeze Triggers Panic Buying

Worldwide silver stocks have hit alarmingly low levels:

LBMA-registered inventories have dropped to about 155 million ounces.
COMEX registered silver is down over 70% since 2020.
Silver lease rates have spiked above 8%, signaling extreme tightness in physical supply.

The problem has been exacerbated by China’s new export restrictions, effective January 1st, 2026. Since China refines about 70% of the world’s silver, prioritizing domestic industry for its solar and electric vehicle sectors, global markets are struggling to secure physical metal.

Premiums on physical silver are telling the story:

Traders in China are paying premiums up to $134 per ounce above paper prices.
In Japan, premiums have climbed even higher, past $139 per ounce.

With physical metal becoming increasingly hard to source, the market is experiencing an intense short squeeze – the kind not seen since the 1980 Hunt Brothers era.

Industrial Demand Fuels a Structural Deficit

Unlike gold, which is hoarded as a store of value, silver is essential for modern industry. It plays a vital role in:

Solar panels (120–125 million ounces annually)
Electric vehicles (around 70–75 million ounces)
AI data centres and 5G electronics, thanks to its unmatched conductivity

According to the Silver Institute, these factors have pushed the silver market into its fifth consecutive year of deficit, with an estimated cumulative shortfall of 820 million ounces between 2021 and 2025. This structural imbalance means that the rally may have deeper roots than previous speculative surges.

What’s Next for Silver Prices?

The gold-to-silver ratio — a traditional gauge of relative value — has fallen to a 15-year low near 46:1, highlighting silver’s outperformance. Analysts are sharply divided on where prices head next:

Equiti Capital forecasts silver could reach $120 per ounce in the near term.
Some analysts project $200 per ounce or higher if gold prices continue to climb and industrial demand remains strong.
Saxo Bank’s Ole Hansen cautions that at some point, “fabricators and end-users simply cannot absorb higher costs,” though alternatives to silver in high-performance applications remain limited.

Potential Headwinds

Price sensitivity: Manufacturers may start substituting cheaper metals where possible.
Monetary policy shifts: Stronger currencies or interest rate increases could pressure commodities.
Recycling supply: Rising prices may incentivize recycling, easing some shortages.

Still, most experts agree this is not a fleeting rally — it reflects a reordering of the global metals market, driven by technological transformation and supply fragility.

The Bottom Line

Silver’s explosive rise past $110 per ounce is more than a price story — it’s a signal of a world in transition. The combined pressures of decarbonisation, supply chain geopolitics, and industrial innovation are converging in a perfect storm for the metal that powers the green revolution.

For investors and industry observers alike, silver may no longer shine in gold’s shadow — it’s carving out its own, far brighter future.