Silver Prices Achieve Key Breakthrough: Analysts Say It Could Challenge the Historical High of $50 This Year!

Silver prices have broken through and stabilized above the key level of $35 per ounce in the past two weeks, giving analysts strong bullish confidence.

Daniel Ghali, Senior Commodity Strategist at TD Securities, said that the silver market is euphoric as prices have broken through the $35-per-ounce level, a level that has been difficult to breach in the past few years. The last time silver prices surpassed this level, they reached nearly $50 per ounce within six weeks, so excitement in the market is now heating up.

David Erfle, founder of Junior Miner Junky, also believes that silver's weekly break above $35 marks a technical breakthrough for silver prices, and that silver prices are fluctuating very rapidly, with significant volatility expected. If silver prices close above $37.5 this month, they could further break through to $40 and challenge the historical high of $50 by the end of the year.

As of press time, the London silver spot price was around $36.35 per ounce.

Reasons for Optimism on Silver Prices

Ghali pointed out that the significant rise in silver prices is somewhat related to inventory imbalances in major trading centers in New York and London. This unresolved market distortion could lead to a series of mini squeezes in the market and drive silver prices to new highs in the near future.

He analyzed that silver ETFs have recently attracted inflows, which are depleting the remaining inventory in the world's largest silver vault system in London. Previously, due to tariff threats from the US, a large amount of silver had flowed from London to New York.

He noted that the current market structure is characterized by extremely scarce silver supply in London, with the amount of silver available for free purchase being less than the amount typically traded daily. However, the London market has not yet factored this scarcity into pricing, nor has the broader market priced in the incentives needed to return silver to actual physical trading locations.

In addition, improving demand prospects are also supporting silver prices. Ghali believes that while tariffs have led many analysts to expect an economic downturn and weaken industrial demand, no signs of this have emerged so far, demonstrating the resilience of demand.

News from US inflation data may also be positive for silver prices. US CPI data for May only rose slightly, well below the significant increase expected by the market due to tariffs, but it could prompt the US Fed to consider an interest rate cut in September. Once interest rates are cut, industrial demand for silver is expected to increase, and the cut will also be beneficial for the rise in precious metal prices.

Erfle provided another reason, which is that silver mining stocks have already moved ahead and are leading the rise in silver prices. He said that miners usually lead the silver price rally and trigger a simultaneous increase. Before the significant rise in silver prices, the fund ETF SIL, which tracks global silver mining stocks, had reached a multi-year closing high, and some other silver mining stocks had also hit new 52-week highs recently.