Silver prices blasted through previous highs on Friday, surging over 5% to $56 per ounce and notching the strongest single-day rally in more than a year, as investors rushed to secure the metal amid tightening supplies and growing concerns of a global shortage.
The grey metal – as tracked by the iShares Silver Trust (NYSE:SLV) – has now gained 95% year to date, on track for its best performance since 1979, when it soared during the Hunt brothers' infamous attempt to corner the silver market.
Why Is Silver Rallying?
Driving the move are deepening physical market imbalances in China. According to official data, silver on-warrant inventories at the Shanghai Futures Exchange fell by 9,361 kilograms to just 531,211 kilograms this week — their lowest level since 2015.
ING commodity analysts Warren Patterson and Ewa Manthey said the sharp stockpile decline reflects large shipments of Chinese silver to London, aimed at easing a price squeeze that recently lifted global prices to record levels. China's silver exports in October exploded to over 660 tonnes, a new all-time high, underlining just how tight the market has become.
Further highlighting stress in China's silver market, Shanghai has flipped into backwardation — a condition in which near-term futures trade at higher prices than longer-dated ones — indicating immediate physical scarcity.
Beyond the tightening in the physical market, growing expectations of monetary policy easing have added momentum to silver’s rally this week. The probability of a 25 basis-point rate cut by the Federal Reserve at its Dec. 10 meeting surged to nearly 90%, up sharply from around 50% just a week earlier.
Will December Add More Fuel To The Silver Rally?
With prices already up over 90% in 2025, many investors are asking if December could extend the rally. Seasonal trends suggest it’s possible.
Over the last 30 years, silver has averaged a 2.12% gain in December — making it the third-strongest month of the year after July's 3.2% and January's 2.7% average returns.
Historically, silver closes December in positive territory 60% of the time. The best December returns for silver occurred in 1997 and 2020, with gains of about 17% on the month.
If tight supply conditions persist, this seasonal tailwind could further amplify the current price momentum.
What About Silver Mining Stocks?
The rally in silver is reigniting interest in mining equities after weeks of subdued performance.
The Global X Silver Miners ETF (NYSE:SIL) rose for a fifth straight session on Friday, jumping over 12% in just two days.
Several silver-focused miners registered double-digit percentage gains as traders piled into the sector.
Leading Friday's gains was Aya Gold & Silver Inc. (OTC:AYASF), up 14.18%, followed by Andean Precious Metals Corp. (OTC:ANPMF) and Discovery Silver Corp. (OTCPK: DSVSF), which rose 12.66% and 12.39%, respectively.
Other notable movers included Gold Resource Corporation (NYSE:GORO), up 11.14%, Silver Mines Limited (OTC:SLVMF), up 11.11%, and Hycroft Mining Holding Corporation (NASDAQ:HYMC), which gained 11.04%.
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