Silver surged past $92 per ounce for the first time on record on Wednesday, extending a rally that has stunned even long-time precious metals investors.
The move comes amid easing inflation data, mounting political pressure on monetary policy, and a growing conviction that structural forces are now driving prices.
Producer price data released Wednesday showed no upside surprise, reinforcing a cooler consumer inflation print on Tuesday and strengthening expectations that the Federal Reserve will continue to cut interest rates later this year.
At the same time, stronger-than-expected U.S. retail sales underscored resilient consumer demand, creating a rare macro backdrop where easing policy expectations coexist with economic strength.
But silver's rally – up 200% over the past year – appears to be about far more than data releases.
Why Is Silver Rallying?
Safe-haven flows towards both gold and silver accelerated earlier this week after the Department of Justice opened a criminal investigation into Federal Reserve Chair Jerome Powell tied to renovation costs at the central bank's headquarters.
Powell said the probe is a "pretext" to increase pressure for lower rates.
The silver rally may be rooted in a Federal Reserve constrained by rising debt, according to precious metals experts.
In a recent exclusive interview with Benzinga, macro analyst Otavio Costa said the precious metals rally is not a momentum trade.
"There's many reasons why metals are very cheap historically speaking, despite the nominal rise that we're seeing in terms of prices," Costa said.
He added that gold and silver remain "in an early stage of a secular bull market."
Costa said the real driver sits beneath the surface. He pointed to debt dynamics that are reshaping monetary policy itself.
As interest costs absorb a larger share of federal spending, he said, the Federal Reserve will find it increasingly difficult to maintain tight policy.
"The path of least resistance will continue to be inflation, inflating our way out of the debt problem," he said, contending that traditional inflation and jobs mandates could become secondary to making government debt affordable.
Currency debasement – the erosion of purchasing power tied to excessive money creation and debt financing – also plays a central role, Costa argued.
He noted that investors often overlook how losing purchasing power can drive early price signals in metals before consumer price data reflect inflation.
Beyond the macro headlines, silver continues to benefit from structurally tight supply, Costa indicated. The market remains in a multi-year deficit, liquidity in London is constrained, and new mine supply has failed to keep pace with demand.
Industrial Demand For Silver Adds Fuel
Silver's rally also reflects expanding industrial demand.
Nikos Tzabouras, senior market analyst at Tradu.com, said silver's growing use in data centers, artificial intelligence chips, clean energy technologies, and defense applications provides a robust structural base for longer‑term demand.
"Silver reaches new record highs supported by U.S. dollar weakness and safe-haven flows," Tzabouras said, pointing to persistent geopolitical uncertainty and concerns over political interference in Federal Reserve policy.
Miners Lag The Metal, Creating Investment Opportunities
Despite silver's explosive move, up 200% over the past year, mining equities – as tracked by the Global X Silver Miners ETF (NYSE:SIL) – have not kept pace.
Over the past three months, the fund rose by nearly 30%, sharply underperforming against the commodity, which rose 80%.
With silver trading near double its 2011 peak, miners are still languishing at decade-old levels—signaling a potential catch-up trade if prices hold.
Yet, five silver-focused miners have delivered gains comparable to, or stronger than, silver over the past three months.
Top-performing silver miners over the past three months include:
- Hycroft Mining Holding Corporation (NASDAQ:HYMC): +332.8%
- Hecla Mining Company (NYSE:HL): +84.4%
- AbraSilver Resource Corp. (OTC:ABBRF): +79.1%
- First Mining Gold Corp. (OTC:FFMGF): +77%
- Discovery Silver Corp. (OTC:DSVSF): +69.1%
Image created using artificial intelligence via Midjourney.
