by Adam Sharp, Daily Reckoning:
As America enjoyed a long Thanksgiving weekend, something big was happening with silver.
The precious metal jumped higher on Friday, rising almost $4 to around $55 per ounce. A fresh all-time high.
Interestingly, in the middle of this incredible run, the CME futures exchange shut down completely. Apparently it was due to a cooling issue at a data center, but the timing does seem strange.
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Many precious metal investors were suspicious that this might be an attempt to cool down overheating silver markets.
We’ve previously covered rumors of big banks being massively short silver with positions in the multi-billions. It’s hard to discern the truth here, but I suspect there is some validity to these rumors.
This is purely speculation. But if some big players were stuck short, and they’re powerful enough to shut the COMEX down in an attempt to stop the rally, their mission nonetheless failed.
Because by today silver had shot up another $4, reaching $59, another new high.
The short squeeze is almost certainly playing a role in this bull run, but there are also more concrete fundamental factors at play.
Solar Drains Silver Supplies
Silver is the best conductor of electricity in the world. Even copper pales in comparison. So when efficiency really matters, silver is the ideal choice.
When it comes to applications like solar panels and electric vehicles, silver is a must-have.
And while both sectors are doing well lately, solar has broken out as a breakthrough source of demand for silver.
A recent article by Reuters summed up silver’s solar outlook well:
Industrial demand rose to 689.1 million ounces in 2024 from 644 million the prior year, according to LSEG data.
Of this, 243.7 million ounces was for use in solar panels, up from 191.8 million the prior year and up 158% from the 94.4 million in 2020.
Global solar capacity additions were about 600 gigawatts (GW) in 2024, and are expected to rise to close to 1,000 GW by 2030.
The International Energy Agency expects 4,000 GW of new solar capacity will be installed from 2024 to 2030.
This suggests that solar alone is going to drive silver demand higher by close to 150 million ounces a year by 2030, which would represent an additional 13% on top of the 2024 physical demand of 1.169 billion ounces.
As you can see, solar is already a huge source of demand for silver, and this is only set to continue growing over the coming years. China is deploying vast amounts of new solar capacity, sucking up an increasingly large percentage of new silver supply.
And here in the U.S., solar is proving to be one of the only options to quickly power up new data centers which are popping up like weeds.
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