The 'perfect storm' that began brewing earlier this year has intensified into a full-blown price surge, propelling silver past the US$66 per ounce mark for the first time in history.
Just five months ago, we reported on the metal’s breakout to a 13-year peak of US$37.04/oz, driven by structural deficits and green energy demand. Since then, the white metal has gone parabolic, nearly doubling in value to trade at $66.87/oz this week.
While the fundamental supply-demand disconnect remains the engine of this rally, the latest fuel comes from a softening U.S. labour market, which has reignited bets on Federal Reserve rate cuts for 2026.
All signs pointing up
The catalyst for this week's record-breaking run was fresh data revealing a "cooling" U.S. economy.
While nonfarm payrolls added 64,000 jobs last month, the unemployment rate ticked up to 4.6% - its highest level since September 2021.
That data point has convinced markets that the Federal Reserve will likely proceed with at least two 25-basis-point rate cuts in 2026 to support the economy.
Lower interest rates typically boost non-yielding assets like precious metals, and silver is currently outpacing its peers by a wide margin.
Gold posted a respectable 1% gain this week to hover around $4,335/oz, - yet silver surged nearly 4% in the same period.
YTD, the gap is still widening: silver is up around 128%, crushing gold’s own impressive 65% return and marking its best annual performance in decades.
Analysts argue that while momentum buying is driving the current price action, it is firmly rooted in the supply constraints Azzet identified back in July.
"The rally is very much investment-driven at the moment," said Rhona O'Connell, head of market analysis at StoneX. "It has a strong fundamental basis, but these prices are being driven by investment and speculation."
Marex analyst Edward Meir, talking with Reuters, said the metal's momentum has become a gravity-defying force of its own.
"Silver is pulling gold up with it... there is money moving out of gold into silver and platinum," Meir said.
“$70/oz appears to be the next logical goal in the short term.”
Geopolitical premiums return
Beyond the economic data, geopolitical tensions are adding a fresh risk premium to the market.
President Trump’s recent order for a "blockade" of sanctioned tankers entering or leaving Venezuela has escalated tensions between Washington and Caracas, prompting a flight to safe-haven assets.
This comes on top of the existing supply chain anxieties. Silver’s inclusion on the U.S. Critical Minerals list earlier this year has fundamentally repriced the metal, shifting its perception from a mere store of value to a strategic industrial necessity.
With demand from the solar, EV, and now the booming AI data center sectors showing no signs of abating, the "chronic undersupply" noted by the Silver Institute earlier this year is being felt more acutely than ever.
