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Silver Soars: Record Highs Driven by Fed Hopes & Supply Crunch
18 Dec
Summary
- Silver prices hover near historic highs due to potential Fed rate cuts.
- Industrial demand from solar, EVs, and AI fuels unprecedented consumption.
- Global inventories are critically low, heading for a fifth annual deficit.
Silver prices are currently trading near historic peaks, hovering around $66.50 per troy ounce as of Thursday. This surge is propelled by a confluence of factors, including anticipated US Federal Reserve rate cuts and significant supply-side constraints that have tightened global inventories. Market participants are increasingly factoring in potential rate reductions by the Fed in 2026, a sentiment bolstered by comments from Fed Governor Christopher Waller suggesting a shift towards lower borrowing costs.
Beyond monetary policy shifts, silver's value is being significantly boosted by robust industrial demand. Key sectors such as solar energy, electric vehicles, AI data centers, and electronics are consuming silver at record levels. This heightened consumption, coupled with stagnant mine supply and limited recycling, has created a persistent deficit in the market. Global inventories have seen substantial draws, with COMEX and Shanghai exchange stocks reaching multi-year lows.
