Silver surges to a historic high: $50 no longer distant, supply gap intensifies the rally

Recent movements in the precious metals market have sparked a strong rally, with silver performing particularly well. Since September, silver prices have surged to a high of $40.9, reaching the highest level since 2011. This rally is even more remarkable—since April, silver has gained 44%, far outpacing gold’s 20% increase during the same period, highlighting its industrial value amid the surge in demand for emerging energy sources.

Supply Gap Continues to Widen, Precious Metals Attractiveness Soars

According to data released by the International Silver Industry Association, the global silver market has been in a supply deficit for five consecutive years. Against this backdrop, the simultaneous rise in silver, gold, and crude oil prices is not a coincidence but reflects market confidence in the US dollar assets wavering. As expectations of Fed rate cuts intensify, investment capital is accelerating out of the dollar and flowing into safe-haven precious metals.

Krishan Gopaul, market analyst at the World Gold Council, pointed out that the current market environment is full of uncertainties—from concerns over the Fed’s independence, the re-emergence of stagflation risks in the US, to the broad weakness of the dollar—all of which reinforce the investment appeal of gold and precious metals. Meanwhile, central banks worldwide are actively promoting reserve diversification, further supporting demand for precious metals. Analysts indicate that the core factors driving this rally are unlikely to fade in the short term.

Historical High of $50 Becomes a Key Psychological Barrier

Financial commentator Peter Schiff offered an important perspective on silver’s recent performance. He stated that the $40 level is a crucial psychological threshold for investors. Once this barrier is broken, silver is expected to quickly surge toward the historic high of $50 per ounce, signaling further market sentiment warming.

Technical Validation: Main Uptrend Accelerates, Targeting Historic Highs

From a technical perspective, the weekly chart of silver shows that prices are in the core upward phase of the main rally. Within this upward structure, silver has formed a clear trend-based rally pattern. The breakout above $40 with an upward gap further confirms the bullish strength, indicating market participants’ optimism about the outlook.

As upward momentum continues to strengthen, silver is expected to maintain a strong performance in the short term. Being in the main uptrend phase, correction space is likely to be limited. Medium-term, silver is poised for further rebound and to challenge resistance near the historic high of $49.8, which will serve as an important signal for position management.

Key Variables for the Market Outlook

Investors should pay close attention to the trends in European and US bond yields. This week, bond yields in the UK, Germany, France, and the US all rose sharply. Against the backdrop of resurging inflation pressures, this reflects ongoing concerns about fiscal deficits in various countries. As bond sell-offs intensify and dollar credit risks further ferment, precious metals are likely to enter a new phase of medium-term rally.