Silver Soars to $79/oz: Supply Crunch, Solar Demand and ETF Flows Drive Volatility
Silver has rallied to about $79/oz — roughly a 150% year-to-date gain — driven by tightening mine supply, strong industrial demand (notably solar-panel manufacturing), retail hoarding and the U.S. designating silver a “critical mineral” in 2025. Major markets for price discovery and access are London OTC physical trades (vaults held by banks such as HSBC and JPMorgan, ~27,187 tonnes reported), futures on COMEX (CME Group) and the Shanghai Futures Exchange, and large ETFs such as BlackRock’s iShares Silver Trust (around 529 million oz, ~USD 39bn). Retail investors primarily gain exposure via ETFs and trading apps; physical bars and coins are available but trade at premiums and move more slowly. Elevated futures open interest and ETF inflows have amplified liquidity and price moves, while miners’ stocks remain correlated but carry company-specific risks. Analysts caution the silver market is relatively small and highly volatile — prices can spike or reverse quickly — so traders should monitor supply reports, ETF flows, COMEX/SHFE open interest and physical vault inventories when positioning. Other precious metals have also posted strong gains, underscoring broad demand for safe-haven and industrial metals.
Bullish
The news is bullish for silver prices. Strong fundamental drivers — constrained mine supply, heightened industrial demand from the solar sector, retail hoarding and the U.S. critical-mineral designation — support sustained upside. Large ETF holdings and continued inflows add persistent buy-side pressure and improve retail access, while rising futures open interest signals leveraged participation that can amplify rallies. In the short term, elevated volatility is likely: rapid ETF flows, changes in open interest, or liquidation in leveraged futures can cause sharp swings. In the medium-to-long term, if supply remains tight and industrial demand continues to grow, price discovery is likely to remain biased upward, benefiting related liquid exposures (ETFs, futures) and exerting positive correlation on mining stocks. Traders should manage risk via position sizing, stop rules and by monitoring ETF flows, COMEX/SHFE open interest and physical vault inventories — these indicators will often precede large price moves.