Silver just hit $120, up 450% in the last 2 years, adding over $6 trillion to its market cap and became the BEST performing assets in the world.
The main reason for this INSANE rally is supply chain + paper market problem happening at the same time.
While gold grabs headlines, silver has actually outperformed it on a percentage basis multiple times in recent cycles.
This isn’t speculation-driven hype. It’s a combination of structural supply constraints and accelerating real-world demand.
Here are the main fundamental drivers:
1. Persistent Market Deficits For four consecutive years.
Global demand has exceeded mine production + recycling. The Silver Institute estimated a 182 million ounce deficit in 2024, the second-largest on record. Cumulative deficits are quietly draining above-ground stocks.
2. China’s Dominance in Refining & Occasional Export
Friction China produces ~15% of global mined silver and controls a significant share of refining capacity. At various points, physical premiums in Shanghai have traded well above global benchmarks, signaling local tightness. Export policies on critical materials indirectly restrict available supply for the rest of the world.
3. Explosive Industrial Demand GrowthMore than 50–60% of annual silver consumption is industrial, and it’s rising fast. Key drivers:
Solar: PV demand hit record levels in 2024 and is forecast to grow another 20%+ in 2025 as countries expand renewable capacity.
Electrification & Tech: EVs, 5G infrastructure, AI data centers, and consumer electronics all rely on silver’s unmatched electrical conductivity.
4. Physical Market Stress Signals
GOFO/lease rates have spiked at times, showing it’s expensive to borrow physical metal.
Periods of backwardation (spot > futures) have appeared - a classic sign of immediate physical scarcity.
COMEX deliverable stocks remain relatively low compared to open interest.
5. Strong Investment & ETF Inflows Silver
ETFs absorbed massive physical volumes in 2024 and into 2025, removing bars from the available market and tightening supply for industrial users.
6. Smaller, More Volatile Market Than Gold
Silver’s total market is ~1/10th the size of gold’s. The same capital flows or demand shocks create much larger price moves. The current silver/gold ratio is near historic lows, when it has been this compressed in the past, silver has often delivered outsized gains.
Well ..
This rally is being driven by real physical fundamentals, not just paper trading. As long as industrial demand keeps growing faster than new supply can come online, the structural setup remains bullish.
Silver won’t go up in a straight line, but the risk/reward continues to look attractive for patient positioning.
What do you think, is silver finally getting the attention it deserves?
#SIlver #Crypto #Markets #Trading $XAU
