The international price of silver hit an all-time high for the first time in 45 years, emerging as one of the best-performing assets this year. A surge in industrial demand, supply shortages, and concerns over tariff policy under the Donald Trump administration are overlapping, spreading what is being called a "precious metals frenzy."
According to Bloomberg on the 13th (local time), silver futures settled at $50.13 per troy ounce (31.1g) on the day, up 6.8%. This came after spot prices touched about $53 around 10:30 p.m. and then eased slightly, marking the highest price in 45 years even in nominal terms. This year, prices of the four major precious metals—gold, silver, platinum, and palladium—have all risen by as much as 82%, leading the commodities rally.
The Wall Street Journal (WSJ) said the imbalance in the silver market is already severe. Since 2020, supply has failed to catch up with demand, resulting in a persistent deficit, and prices have climbed more than 73% this year alone, far outpacing gains in gold (56%) and the Nasdaq index (17%). Recycling volumes are falling and new mine production is stagnant, while industrial demand is surging.
Like gold, silver is drawing attention for its safe asset value, and it is also widely used as an industrial material in electronics, solar power, semiconductors, and artificial intelligence (AI) components. For example, a single solar panel contains around 20g of silver, and silver use by solar manufacturers has more than doubled over the past decade. In addition, silver materials are used in most electronic manufacturing, including electric vehicles, and industry recently has been developing technology to recover silver from discarded silicon wafers.
The market is also on edge over the tariff risk under the Trump administration. The U.S. Geological Survey (USGS) recently proposed designating silver as a "Critical Mineral," and if the plan is realized, silver would be classified as an essential resource for national security and could likely be subject to tariffs. Similar examples include steel, aluminum, and copper. As a result, exchanges are moving to preemptively stockpile silver by increasing self-held inventories at each warehouse, which is seen as fanning the price rally.
Sree Kargutkar, portfolio manager at Sprott Asset Management, a precious metals specialist, said, "The amount of silver mined and recycled is not keeping up with actual consumption," adding, "This is a textbook case of supply-demand imbalance." Kargutkar added, "Amid tariff uncertainty, warehouses worldwide have tried to secure their own inventories, heightening market tension."
The instability is spreading across financial markets. Recently in London's spot market, silver has traded at a higher premium than in New York, and with aggressive buying by local dealers, traders have even resorted to airlifting silver bars on an emergency basis. It is seen as highly unusual for the costly air routes typically used only for gold shipments to be mobilized for silver transactions.
Banks expect the rise in silver prices to continue for the time being. Citigroup recently raised its silver price outlook to $55 per ounce, analyzing that "the surge in gold prices and geopolitical uncertainty is strengthening the shift into silver investments." As gold surpassed $4,000 per ounce (about 5.73 million won), investors and jewelry consumers burdened by the price have turned their eyes to silver as a substitute. Bank of America (BoA) also raised its end-2026 silver price target to $65 per ounce from $44.
Still, experts warn of the possibility of a short-term correction due to overheating. Last week, silver futures fell $1.8 (3.7%) in a single day, the biggest daily drop since April. As before, President Trump's additional tariff announcement appears to have been the catalyst this time as well. A slowdown in industrial silver demand or in the pace of solar installations could also become drivers of future corrections.
Goldman Sachs warned, "In the short term, silver's price volatility is greater than gold's, and the downside risk may also be larger," adding, "Unlike gold, silver lacks the institutional and economic underpinnings that support demand."