While gold's relentless march toward $5,000 per ounce has captured headlines, silver has quietly staged one of the most spectacular rallies in commodities history. The white metal surged to $79.95 per ounce last week, capping an extraordinary 163% gain over the past twelve months that has left even bullish forecasters scrambling to revise their targets.

The China Factor

The latest catalyst for silver's surge is China's export restriction on refined silver, which went into effect January 1, 2026. This policy shift has sent tremors through global silver markets, as China has historically been a significant supplier to international buyers.

Some analysts are characterizing the restriction as a potential "supply shock" that could drive prices materially higher. Silver already faces a structural deficit—demand has outpaced mine supply for five consecutive years, with the 2024 shortfall reaching a staggering 500 million ounces.

"China's export restriction could be the supply shock that sends silver to triple digits. The market was already tight, and this removes a key source of refined metal from the global supply chain."

— Precious metals market analyst

The Dual Demand Driver

What makes silver unique among precious metals is its dual role as both an investment asset and an industrial commodity. This dual demand profile has created a perfect storm of buying pressure.

On the industrial side, solar panel manufacturing continues to consume record quantities of silver. Electric vehicle production, 5G infrastructure buildout, and electronics manufacturing all require significant silver inputs. These applications are growing faster than new mine supply can accommodate.

On the investment side, silver has benefited from the same factors driving gold: Federal Reserve uncertainty, geopolitical tensions, and concerns about fiscal sustainability. But silver's relative affordability has made it more accessible to retail investors, amplifying demand during periods of precious metals enthusiasm.

The Path to $150

Bank of America precious metals analyst Michael Widmer has laid out a scenario where silver could reach between $135 and $309 per ounce, depending on various demand and supply assumptions. While the upper end of that range seems extreme, the $135 target—roughly 70% above current levels—is gaining credibility among market observers.

MacroMavens president Stephanie Pomboy sees even more upside ahead. "I think there is so much more to come because the rationale as to why I wanted people to go long hard assets over paper has barely started to fall into place," she noted in a recent interview.

The bull case rests on several factors converging: the China export restrictions tightening supply, industrial demand continuing to grow, investment demand remaining robust, and mine supply struggling to keep pace with consumption.

The Volatility Warning

Investors attracted by silver's remarkable returns should understand the risks. Silver is notoriously volatile—its price can move 5% or more in a single session, as demonstrated by recent trading. The metal fell sharply late last week as investors positioned ahead of index rebalancing, only to recover quickly.

The gold-silver ratio, which measures how many ounces of silver it takes to buy one ounce of gold, currently sits around 57—historically normal but below the extremes that have marked silver's best relative performance periods. If the ratio returns to the low 40s, as some bulls expect, silver would substantially outperform gold from here.

2025's Remarkable Performance

To appreciate where silver is, consider where it's been. In 2025, silver gained more than 142%—its best annual performance since 1979, when the Hunt brothers' infamous attempt to corner the market drove prices to all-time highs.

Gold posted a 65% gain in 2025, also exceptional by historical standards. But silver's outperformance by a factor of more than two highlights the leverage the metal offers during precious metals bull markets.

The 2025 rally was driven by a repricing of U.S. interest rate expectations, which reduced real yield pressure and encouraged fresh long positioning. Geopolitical risks, particularly around Venezuela and East Asia, provided additional support.

How to Play Silver

Investors interested in silver exposure have several options:

  • Physical silver: Coins and bars offer direct exposure but come with storage costs and dealer premiums
  • Silver ETFs: Funds like SLV provide liquid exposure without physical storage concerns
  • Mining stocks: Silver producers offer leveraged exposure but add company-specific risk
  • Futures: For sophisticated traders, futures provide the purest price exposure but require active management

The Outlook

Silver's remarkable rally has created a challenging environment for new buyers. The easy money has been made, and anyone purchasing at current levels is betting that structural supply deficits and investment demand will continue pushing prices higher.

The China export restriction provides a near-term catalyst, but the longer-term case depends on industrial demand growth outpacing supply additions and continued investment interest in hard assets. Both conditions appear likely but are not guaranteed.

For those already holding silver, the question is whether to take profits or ride the momentum higher. History suggests precious metals bull markets can extend far beyond what seems rational—but they can also reverse violently. Position sizing and risk management matter more than ever at these elevated levels.