• Spot silver climbed 3% to $89.11 per ounce, marking its highest level in recent weeks.
  • The rally is fueled by a combination of safe-haven buying amid geopolitical tensions and rising industrial demand, particularly from the solar energy sector.
  • Analysts point to softer real yields and a weaker US dollar as additional tailwinds, though profit-taking risks remain.

Silver Breaks Above $89

Silver prices jumped on Thursday, with spot metal gaining 3% to reach $89.11 per ounce, according to market data. The move outpaced gold, which rose 1.2%, highlighting silver's dual role as both a monetary metal and an industrial commodity.

Traders cited heightened geopolitical risks and expectations of looser monetary policy as key catalysts. “Investors are piling into precious metals as a hedge against uncertainty,” said a senior metals strategist at a European bank. “Silver is also benefiting from its exposure to the green energy transition.”

Fundamentals Support Rally

On the supply side, global silver mine output is expected to decline slightly this year, according to industry estimates, while industrial demand—especially from photovoltaic manufacturing—remains robust. The Silver Institute recently noted that solar panel production could consume a record 200 million ounces in 2024, up 15% year-on-year.

ETF flows have turned positive, with the largest silver-backed fund posting inflows for the past three sessions. Meanwhile, open interest in COMEX silver futures has risen, signaling fresh long positions.

Economic Context

The move comes as US real yields—adjusted for inflation—have fallen deeper into negative territory, reducing the opportunity cost of holding non-yielding assets. The dollar index slipped 0.3% on the day, further boosting commodities priced in the currency.

Market participants are now focusing on next week’s Federal Reserve meeting, where policymakers are expected to hold rates steady but may signal a cut later this year. “A dovish Fed would be a major green light for silver,” said a fund manager at a London-based asset manager.

Regional and Corporate Impact

In Europe, mining stocks rallied, with Fresnillo and Polymetal gaining over 4%. Analysts note that European silver miners are particularly sensitive to price moves due to higher production costs.

Outlook and Risks

While the near-term momentum is bullish, some warn of overheating. “Silver has a history of violent corrections after parabolic moves,” said a technical analyst. Key support lies at $86, while resistance is at $92.

Correction: An earlier version of this article misstated the previous day's closing price. Silver closed at $86.52 on Wednesday, not $87.00.