Why is silver price rising and how long will it rise as silver price hits a new record high of $66.5 per ounce, up 130% this year

Silver price hits new record: Silver prices are hovering near historic highs as powerful macro and supply-side forces continue to reshape the market. XAG/USD traded around $66.50 per troy ounce during European hours on Thursday, staying close to its all-time high near $66.90 set earlier this week. The rally reflects a rare convergence of softer US monetary expectations, slowing labor data, and persistent physical shortages that have tightened global inventories.

Markets are increasingly pricing in two US Federal Reserve rate cuts in 2026, a shift that has boosted demand for non-yielding assets such as precious metals. The move gained momentum after Fed Governor Christopher Waller suggested borrowing costs may need to fall by as much as one percentage point over time. His comments came as fresh US labor data signaled a cooling job market, with unemployment rising to 4.6%, the highest level since 2021.

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Beyond monetary policy, silver’s surge is being fueled by structural demand. Rapid expansion in solar energy, electric vehicles, artificial intelligence data centers, and electronics has pushed industrial consumption to record levels.

The silver market remains extremely tight in late 2025, driven by deep structural supply deficits and shrinking global inventories as prices hold above $60 per ounce. Global mine supply is largely flat near 813 million ounces, while recycling growth remains limited. This imbalance is pushing the market toward a fifth consecutive annual deficit of 95–149 million ounces, with cumulative shortfalls since 2021 now exceeding 796–820 million ounces, forcing sustained draws from stockpiles.