Silver soars past $66 an ounce, will it hit $70 soon?

Silver surged past $66 an ounce for the first time to record highs on Wednesday, as weaker than expected US jobs data hinted at a cooling labour market, fuelling bets on more interest rate cuts next year. 

According to Reuters data, spot silver was up 4 per cent at $66.30 an ounce at 9.25pm UAE time after touching an all-time high of $66.52 earlier in the session, extending a rally driven by tight supply, strong industrial demand and rising speculative interest.

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Silver has more than doubled in 2025, on a rare alignment of monetary, structural and physical-market forces. Tight supply, price-inelastic industrial demand and policy-driven dislocations have amplified the rally well beyond what gold alone would normally justify, a Saxo Bank research note said.

“Silver’s relentless surge in 2025 will be remembered as one of the most dramatic revaluations in modern precious metals history. Having spent much of the past decade oscillating between being perceived as a monetary metal and an industrial input, silver finally resolved that identity crisis this year by being both at the same time — just as supply constraints became impossible to ignore,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said.

The doubling in price did not happen in isolation. It began with gold. When the gold-silver ratio spiked above 105 in April — an extreme rarely sustained — silver increasingly looked mispriced. That valuation gap became the entry point for both speculative and longer-term investors. Once key technical resistance levels gave way from August onwards, momentum buying accelerated sharply, turning relative value into outright price discovery.

Behind this move sat a broader macro backdrop that has strongly favoured hard assets. Trust in fiat currencies has continued to erode amid persistent inflation pressures, rising fiscal deficits and growing concerns in bond markets about debt sustainability. Central bank gold buying remained robust, and while gold captured most institutional attention, silver benefitted as the lower-priced, higher-beta alternative.

On the demand side, India has emerged as a key source of incremental buying, analysts say. This has been driven primarily by retail investment and jewellery demand rather than purely seasonal factors, reflecting silver’s role as an affordable alternative to gold. Meanwhile, inflows into silver-backed ETFs have reached around 130 million ounces this year, lifting total holdings to roughly 844 million ounces — an 18% increase — led overwhelmingly by retail participation, with institutions still favouring gold, Saxo Bank data showed.

“Silver’s break above $65/oz is a landmark move and underscores how stretched, but also how powerful, the current rally has become. Prices have more than doubled this year, supported by a rare convergence of macro tailwinds, aggressive ETF inflows and acute physical tightness. Silver-backed ETFs are on pace for a sixth consecutive week of inflows, with nearly 590 tonnes added recently, signalling that investors are still willing to add exposure even at record levels,” Vijay Valecha, CIO, Century Financial, told Khaleej Times.

From a macro perspective, silver continues to ride on gold’s re-rating story. With the markets expecting further rate cuts into 2026, resilient central-bank demand for gold, and concerns around the Federal Reserve’s independence are all supportive for precious metals. Historically, when gold enters a sustained easing-cycle rally, silver tends to outperform due to its higher beta. Importantly, in this instance, silver’s rapid rise is positively affecting bullish sentiment toward gold.

The core difference between this rally and past episodes is the supply side, Valecha said. “Physical markets remain extremely tight. London lease rates are elevated near 6 per cent, Shanghai inventories have dropped to decade lows, and backwardation signals immediate scarcity. At the same time, industrial demand linked to solar, electrification, data centres, and AI infrastructure is accelerating, reinforcing silver’s dual role as both a monetary and industrial metal,” he added.

That said, the current rally might be running hot. Momentum indicators such as the RSI are firmly in overbought territory, and silver is trading well above long-term trend levels. “Historically, moves of this degree tend to be followed by sharp, short-term corrections. Volatility is likely to persist, with pullbacks driven by profit-taking or brief periods when gold lags behind,” Valecha said.

Even so, near-term extensions toward $70–75/oz are quite possible as physical tightness persists and gold resumes a stronger upward leg. Although this rally is not expected to continue indefinetly, the core fundamentals supporting Silver’s uptrend remain very much intact, including tight supply, favorable macro conditions, and broadening commodity participation. Silver’s path higher is unlikely to be smooth, but the structural bull case has not faded yet, analysts say.

However, the bullish case is not without risks. “A sharp slowdown in AI-related investment — potentially triggered by a correction in stretched valuations — could soften demand for chips and data-centre infrastructure while weighing on broader risk sentiment. Relative valuation also warrants attention,” Hansen said.

Somshankar Bandyopadhyay

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somshankar@khaleejtimes.com

Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.