The price of silver has surged beyond $65 per ounce for the first time ever, decisively outperforming gold this year. The white metal’s rally of approximately 130% year-to-date represents a historic move. As quotations etch new records, the underlying supply situation is becoming critically tight, with a structural deficit looming on the horizon.

Key Data Points

• The silver price has breached the $65 level, setting a fresh all-time high.
• Its year-to-date gain of around 130% significantly outpaces gold’s performance.
• The US unemployment rate has risen to 4.6%, its highest level since 2021.
• A forecasted market deficit for 2026 is intensifying supply concerns.
• The next technical target is the psychologically significant $70 threshold.

Safe-Haven Demand Fueled by Economic Data

Conflicting signals from the US labor market acted as a catalyst for silver’s advance. On Wednesday, the metal jumped over 3.5%, with futures contracts gaining more than 4%. This surge was triggered by data showing the unemployment rate climbing to a three-year high of 4.6% in November, even as new hires exceeded expectations. This mixed picture has sown doubts about economic resilience, driving increased investor flows into alternative assets like precious metals.

Market expectations now heavily favor the Federal Reserve holding interest rates steady in January, with roughly a 75% probability assigned to this scenario. This less restrictive monetary policy outlook provides additional support for non-yielding assets, including silver. Concurrently, the US Dollar Index is struggling to recover near 98.30, weighed down by softer economic data and dovish expectations for the central bank.

Industrial Demand Explodes Against Structural Shortfall

Silver’s unique investment case is bolstered by its dual identity as both a precious metal and a crucial industrial commodity. Mine production is failing to keep pace with skyrocketing consumption, and declining stockpiles are further straining the supply chain.

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Several high-growth sectors are driving unprecedented demand:
* Solar Power: Photovoltaic manufacturing is experiencing robust expansion.
* Electric Vehicles: Rising need for electronic components in EVs.
* AI Infrastructure: Massive silver requirements for data centers powering artificial intelligence.
* Semiconductors & Electronics: Consistently strong industrial offtake.

The United States has officially classified silver as a critical material. Market analysts are warning of a substantial supply shortfall in the coming year. This fundamental backdrop is attracting strong inflows into silver-backed exchange-traded funds (ETFs), while retail investors are increasingly purchasing physical bullion.

Technical Outlook Points Toward $70

From a chart perspective, silver has decisively broken through a major long-term resistance level at $57.65. The upward momentum remains firmly intact. On any short-term pullbacks, support levels are situated near $62.50 and $60, which could present potential entry points. The current bullish scenario would only be seriously challenged by a sustained drop below $55.

The gold-to-silver ratio has declined in response, highlighting silver’s outperformance. This trend underscores the metal’s favorable position at the intersection of monetary policy, economic concerns, and physical scarcity. The market’s attention now turns to upcoming US inflation data, which could provide the next catalyst for price movement.

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