Why silver prices surfed a 160% wave in 2025, Pg10

Key Highlights:

• Silver prices surged by over 160% in 2025 and continued to rise in the first week of 2026 by more than 7%.
• The price increase is driven by silver's use in manufacturing, particularly in batteries, solar panels, and artificial intelligence applications.
• The United States added silver to its list of critical minerals in November, influencing government financing and tariff reviews.
• China's new rare metals export restrictions, effective from January 1, include silver, raising concerns among users.

Detailed Insights:

• Silver's demand is fueled by its crucial role in industries like AI, requiring it for smartgrid infrastructure and data transmission.
• The US Geological Survey (USGS) added silver to the critical minerals list after refining its analysis of supply chain disruptions and economic impacts.
• Stockpiling of silver in the US increased significantly due to tariff fears, with inventories rising to 531 million ounces in late September.
• Shortages of physical silver in markets like London led to price spikes, particularly around Diwali in October.
• Increased investment in silver ETFs in India contributed to price increases, with inflows in September 2025 reaching Rs 5,342 crore.
• Some mutual funds temporarily paused fresh investments in silver ETFs due to high domestic prices compared to international benchmarks.
• The rise in silver prices is part of a broader trend of increasing commodity prices, including copper, driven by US tariffs and shortages.

Key Concepts Involved:

• Critical Minerals: Minerals essential to the economy and national security, subject to supply chain vulnerabilities.
• Exchange Traded Funds (ETFs): Investment funds that track the price of an asset, such as silver or gold, and trade on stock exchanges.
• Debasement Trade: Buying assets like precious metals and cryptocurrencies to protect against the weakening of a currency.