by Mac Slavo, SHTF Plan:
In January 2025, silver traded as low as $30 per ounce. Yesterday – just twelve months later – it surpassed $93, recording an all-time high. This isn’t a short-lived spike driven by speculation alone – its surge follows tightening physical supply, rising industrial demand, and growing geopolitical influence over critical materials. Its late 2025 rally – shooting from $45/oz on 28 October to $83 just two months later – initially looked like a short burst before dropping immediately after.
But since the New Year, the price run-up has continued, and momentum feels stronger than ever. So, what’s driving it, and what really happens if it keeps going up? Can the same structures that have kept silver subdued for decades still function if the demand for the physical metal continues to accelerate?
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Silver – Where Industrial Demand Meets Supply Inelasticity
Silver behaves differently to gold because of its growing industrial need. Roughly half of annual silver demand comes from manufacturing, including electronics, solar panels, medical equipment, and EV batteries. Gold has long been able to sit in vaults indefinitely, whereas silver is actively consumed.
The main difference is that the silver supply is inelastic. Most silver is not mined on its own, but rather produced as a by-product of copper, zinc, and lead mining. When silver prices rise, miners can’t simply increase supply unless the base metal output increases too. This means supply responds slowly, if at all.
This creates a structural problem. Industrial demand keeps rising with electrification, digitisation, and energy transition projects, while supply remains largely fixed in the short and medium term. Unlike other commodities, silver can’t easily flood the market when prices rise. As we’re seeing now, such asymmetry means the price moves violently when demand pressure builds.
Can Silver Really Keep Going Up?
At around $90/oz, it’s already astronomically expensive when compared to prices in recent years. Yet many analysts argue that silver is still undervalued even at these record-high prices, given its function and scarcity.
The market has long been dominated by paper contracts rather than physical settlement. But if silver were priced purely on physical availability and industrial need, and free from futures-market distortions, its “real” price is often argued to be around $150/oz – some estimates put it even higher.
If silver really did move toward $150, the consequences would be immediate. Industrial users would face sharply higher input costs, compressing solar panel margins and forcing electronics manufacturers to attempt substitution and thrift – reducing silver per unit where possible. However, many applications simply cannot replace silver without performance loss.
As the price keeps rising, the market is quietly facing a new question: how much silver does the modern economy actually need – and at what price?
China’s Growing Leverage Over Silver
Now layered on top of supply constraints is geopolitics – particularly, China’s expanding control over the global supply of strategic materials. New export licensing rules introduced by Beijing on 2nd January 2026 have not banned silver exports outright, but they have made access conditional and less transparent.
China is deeply embedded in both silver refining and downstream manufacturing. More than half of the world’s supply flows through the country for one reason or another. So, now that controls have tightened, the rest of the world can expect more friction. The possibility of delayed or restricted exports has forced non-Chinese manufacturers to secure supplies earlier and stockpile more aggressively to avoid higher premiums.
