Silver Hits Fresh Highs Buoyed by Supply Crunch and Industrial Demand

Dual Demand Drivers

Silver's exceptional performance is underpinned by both investment and industrial demand. The divided vote by the US Federal Reserve to cut rates has softened the US Dollar, making dollar-priced silver cheaper for foreign buyers. Concurrently, demand for the metal in the renewable energy sector, particularly solar panels, is accelerating, creating a structural deficit in the physical market.

Supply Shortage Concerns

Concerns over supply shortages have escalated following multiple mine disruptions globally. Traders are also rushing to ship supplies into the US ahead of potential tariff changes next year, which is exacerbating the immediate tightness in the physical silver market. This supply crunch is providing immense bullish momentum.

Outperformance of Gold

The Gold/Silver ratio has narrowed, reflecting silver's outperformance. The metal is seen as having greater upside potential due to its leverage to both monetary policy shifts and the long-term, non-cyclical demand from the electrification wave, positioning it strongly for gains deep into 2026.