Will the record rise in silver continue? Experts weigh in
The price of an ounce of silver has reached its highest level in history, climbing to 64.6 dollars. Concerns over supply, investor demand, and high industrial usage have triggered this surge.
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Last week, the price of an ounce of silver hit a record high, reaching 64.6 dollars. This increase is drawing attention as a result of supply concerns, rising investor demand, and intensive use in the industrial sector. Silver saw an increase of over 10 percent last week, gaining 13.5 percent compared to the end of November and over 120 percent compared to the end of 2024.
THE IMPACT OF CUSTOMS DUTIES AND INFLATION
The possibility of the US imposing potential customs duties on silver has further exacerbated the global silver shortage. This situation has triggered a buildup of large silver stocks, particularly in the US. The inclusion of silver on the US list of critical minerals has also been effective in driving up prices. The US is expected to make announcements regarding tariffs on silver and other commodities in the coming weeks.
INDIVIDUAL INVESTOR DEMAND IS RISING
Demand for silver from individual investors in North America has also increased. Silver, known as the "poor man's gold," has become an attractive alternative for investors during this period. In India, the pension regulator's decision to allow gold and silver investments has also contributed to the rise in precious metals. Earlier this year, China granted insurance companies permission to allocate 1 percent of their assets to gold.
Ole Hansen, Head of Commodity Strategy at Saxo Capital, notes that 58 percent of global silver demand comes from the industrial sector. The use of silver is increasing, particularly in the technology and industrial sectors. Hansen stated that the high levels of silver leasing rates in London are a classic indicator of supply shortages.
RISK OF A SHARP DECLINE IN SILVER
Hamad Hussain, Climate and Commodities Economist at Capital Economics, emphasized that the rise in silver prices is largely dependent on positive investor sentiment. However, he pointed out that if there is a shift in investor sentiment in the coming period, silver prices carry the risk of a sharp decline to as low as 40-45 dollars.