Silver Prices Hit All-Time Highs: What Investors Need to Know About This Historic Surge

• Weakening U.S. Dollar: Driven by Federal Reserve rate cut expectations.
• Geopolitical Tensions: Increasing safe-haven asset appeal.
• Industrial Demand: Massive growth in photovoltaics, AI data centers, and EVs.
• Supply Deficit: Five consecutive years of production falling short of demand.

Silver just did something it’s never done before.

On January 23, the London spot silver price surged 7.42% in a single day, blowing past the $100.00 USD (¥718.51 RMB) psychological barrier and hitting an intraday peak of $103.37 USD (¥742.72 RMB) per ounce.

According to Wind (Wande 万得) data, the metal has climbed an astounding 44.38% since the start of 2026.

This isn’t a fluke.

There are real, measurable forces pushing silver to levels we’ve never seen before—and understanding them could be the difference between capitalizing on this trend or getting caught in the next correction.

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Why Silver Is Exploding Right Now

Several converging factors are creating the perfect storm for silver prices.

Yu Xiaoming (于晓明), Senior Investment Consultant at Shaanxi Jufeng Investment Information Co., Ltd. (Shaanxi Jufeng Touzi Zixun Youxian Gongsi 陕西巨丰投资资讯有限责任公司), breaks down the core drivers:

• Weakening U.S. dollar fueled by expectations of Federal Reserve rate cuts making precious metals more attractive
• Geopolitical tensions boosting safe-haven demand across commodity markets
• Industrial demand explosion from photovoltaics, AI data centers, and new energy vehicles

Song Xiangqing (宋向清), Vice President of the China Business Economics Association (Zhongguo Shangye Jingji Xuehui 中国商业经济学会), adds that silver’s breakthrough past the $100 threshold represents “a resonance between supply-demand imbalances, the global financial environment, and industrial transformations.”

Translation: this isn’t just one thing happening.

It’s multiple tailwinds hitting simultaneously.

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The Supply Problem: Five Years of Shortage

Here’s what most casual investors miss about silver markets.

The metal faces a fundamental supply-demand imbalance that’s been widening for years.

Qu Rui (瞿瑞), Senior Associate Director at Golden Credit Rating (Dongfang Jincheng 东方金诚), highlights the critical issue:

• Five consecutive years of silver supply falling short of demand
• Limited growth in silver mine production despite rising demand
• Historic lows in global silver inventories
• Demand fueled by photovoltaics, AI data centers, and new energy vehicles—all structural growth trends

This isn’t cyclical demand that disappears in a downturn.

This is structural demand tied to megatrends like energy transition and AI infrastructure buildout.

The widening supply-demand gap is providing what experts call “strong support for price increases.”

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Why the Dollar Matters More Than You Think

The Federal Reserve’s pivot toward rate cuts is reshaping precious metals markets.

When the Fed cuts rates, the U.S. Dollar Index falls.

When the dollar weakens, silver becomes cheaper for international buyers (since it’s priced in dollars), which typically drives up demand and prices.

Qu Rui notes that the continued rate-cutting cycle has pushed the U.S. Dollar Index lower, “significantly enhancing the attractiveness of silver’s precious metal attributes.”

This is a macro headwind for the dollar—and a tailwind for silver holders.

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Understanding the Gold-Silver Ratio: Is Silver Cheap or Expensive?

Traders use a metric called the “gold-silver ratio” to measure whether silver is overvalued or undervalued relative to gold.

Here’s how it works:

• Formula: Gold Price ÷ Silver Price
• Historical range: 60–70 ratio for extended periods
• Above 80: Gold is overvalued relative to silver (silver is “cheap”)
• Below 50: Silver is outperforming and may be “expensive”

Here’s where it gets interesting.

As of January 23, with London spot gold at $4,981.31 USD (¥35,791.41 RMB) per ounce and silver at $103.34 USD (¥742.50 RMB), the gold-silver ratio sits at 48.2.

That’s significantly lower than the historical average.

This tells us one thing: silver has massively outperformed gold recently, and relative to gold, it’s trading at expensive levels.

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What Happens Next? The Outlook for Silver Prices

Experts are split between bullish long-term views and warnings about near-term volatility.

The Short-Term Picture: Expect Turbulence

Yu Xiaoming believes silver is currently at a high level relative to gold.

In the near term:

• Prices will likely fluctuate around these elevated levels
• Volatility will intensify—potentially dramatically
• Gold’s performance will drive medium-term trends
• The gold-silver ratio convergence will matter
• Industrial demand and supply chain variables will create uncertainty

Song Xiangqing offers a specific price target: $110.00 USD (¥790.36 RMB) to $120.00 USD (¥862.21 RMB) in the medium term.

However, there’s a catch.

“The massive gains at the beginning of the year have accumulated downward pressure,” Song warns, meaning increased volatility is expected as the market digests these gains.

The Long-Term Picture: Room to Run?

Qu Rui notes that while the current ratio below 50 signals an overbought condition that could trigger a correction, several factors could keep prices elevated:

• COMEX registered warrants and London deliverable silver stocks at historic lows create squeeze risk
• The approaching March delivery month could trigger a “short squeeze,” potentially driving prices even higher
• Peak season for photovoltaic installations in Q1 means rigid growth in silver paste demand
• Silver’s rising status as a strategic resource and widening supply-demand gap suggest long-term upside potential

The bottom line: there’s structural support beneath silver prices, but near-term volatility will be intense.

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Critical Risks Every Silver Investor Must Know About

If you’re considering entering the silver market, understand these risks clearly.

1. Price Volatility Risk

Silver is two to three times more volatile than gold.

Daily drops can exceed 7%, and in extreme conditions, crashes of 9% or more have occurred.

If you can’t stomach that volatility, silver isn’t for you.

2. Valuation Bubble Risk

During speculative surges, silver prices can deviate significantly from intrinsic value.

With the gold-silver ratio at 48.2 (well below historical averages), we may already be in elevated territory relative to fundamentals.

3. Liquidity and Squeeze Risk

This is the dangerous one.

Deliverable silver stocks in London are currently insufficient to cover the volume of open interest claims.

This can cause extreme price swings as delivery months approach.

In tighter delivery months, you could see wild intraday moves that blindside unprepared traders.

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The Bottom Line: Silver’s Historic Surge and What It Means for Investors

Silver prices have hit all-time highs for real, structural reasons—not speculation alone.

The fundamentals are there: years of supply shortages, industrial demand from green tech and AI, a weaker dollar, and geopolitical uncertainty.

But the risks are equally real.

Volatility will likely intensify in the near term.

The metal may be overvalued relative to gold.

And liquidity squeezes could create outsized price swings.

If you’re bullish on silver prices reaching new highs, understand what you’re getting into.

The potential upside is there—but so is the downside risk.

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References

• International Silver Prices Reach New Highs, Industry Predicts Intensified Volatility – Securities Daily (Zhengquan Ribao 证券日报)
• Gold and Silver Market Data – World Gold Council
• Global Silver Supply and Demand Trends – The Silver Institute
• Real-time Precious Metals Market Coverage – East Money (Dongfang Caifu 东方财富)