• Spot silver jumped more than 3% to $74.97 per ounce, marking its biggest single-day gain in weeks.
  • The rally is fueled by strong industrial demand, particularly from solar and electronics, alongside a softer dollar and falling real yields.
  • Analysts see further upside if supply constraints persist and inflation expectations remain elevated.

Silver Breaks Out

Spot silver surged over 3% on Thursday, breaching the $74.97 level as a wave of buying swept through precious metals markets. The move outpaced gold, which rose 0.8%, highlighting silver's growing sensitivity to industrial demand and macro shifts.

“Silver is getting a double boost — from safe-haven flows and from industrial optimism,” said a metals trader at a European bank. “The solar and EV sectors are absorbing supply faster than expected.”

What’s Driving the Rally?

The rally comes amid a softer U.S. dollar and declining real interest rates, which traditionally support precious metals. But silver’s industrial use in photovoltaics, electronics, and automotive components is adding an extra layer of demand. According to industry data, global silver fabrication demand for solar panels is projected to rise 15% this year, outpacing mine supply growth.

On the supply side, mine output remains constrained due to operational disruptions in Peru and Mexico, the top two producers. “We’re seeing a structural deficit that could widen further,” said a mining analyst at a London-based consultancy.

Market Reaction and Outlook

Silver miners’ shares rallied in tandem, with Pan American Silver and First Majestic Silver rising 4% and 5%, respectively. The iShares Silver ETF saw inflows of over $200 million in the past two sessions, according to data from the exchange.

Looking ahead, resistance levels near $76 and $78 could be tested if economic data continues to favor lower rates and robust industrial activity. “The macro setup is favorable, but silver remains volatile,” a commodities strategist warned. “Any hawkish surprise from central banks could reverse the move.”

A spokesperson for the Silver Institute declined to comment on daily price moves, but noted that “industrial demand fundamentals remain strong.”

(Corrects previous version to reflect accurate percentage gain.)