Silver prices skyrocketed to an unprecedented all-time high on Monday, December 1, 2025, capping a remarkable rally that has seen the white metal double in value this year. This performance has significantly outpaced gold, which has gained a robust but comparatively lower 60 per cent over the same period.
A Historic Rally Fueled by Tight Supplies
The white metal surged as high as US$57.86 per ounce, extending a six-day consecutive winning streak. This follows a nearly six per cent jump to a previous record just last Friday. Analysts point to intense speculative trading focused on persistent global supply tightness as the primary catalyst for the surge.
While a record amount of silver flowed into London vaults in October to alleviate a historic squeeze in the world's key trading hub, the pressure has simply shifted elsewhere. Inventories in warehouses connected to the Shanghai Futures Exchange have recently plummeted to their lowest levels in nearly a decade. Furthermore, the cost of borrowing silver for one month remains elevated, signaling continued market strain.
Monetary Policy and Investor Sentiment Provide Tailwinds
The broader precious metals complex is also receiving a boost from shifting expectations for U.S. monetary policy. Markets are now fully pricing in a quarter-point interest rate cut by the Federal Reserve in December. This expectation is fueled by ongoing weakness in the American labour market, a wave of dovish commentary from Fed officials, and economic data released after the recent U.S. government shutdown.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like silver and gold, making them more attractive to investors. The outlook was further influenced by former President Donald Trump's announcement on Sunday that he has selected his nominee for the next Fed chair, a candidate markets anticipate will advocate for lower rates.
"With gold taking a breather, it appears investors have turned their attention to silver," noted Daniel Hynes, a commodity strategist at ANZ Group Holdings Ltd. He added that "shortages in the global market as a result of the recent squeeze in London are still being felt."
Market Dynamics and Future Risks
The rally has shown clear signs of speculative momentum. David Wilson, director of commodities strategy at BNP Paribas SA, observed that "the move last week has been speculatively driven, with accelerating upside momentum attracting more and more fast money." A key metric, the gold-silver ratio—which indicates how many ounces of silver buy one ounce of gold—has fallen close to 70, prompting investors to watch silver's relative valuation closely.
Market activity underscores the bullish sentiment. The spread between call and put options on silver futures recently reached its highest level since 2022, indicating a surge in the cost of betting on further price increases. Traders are also wary of potential new tariffs after the U.S. Geological Survey added silver to its list of critical minerals last month, creating hesitation to move metal out of the country.
The bullish wave lifted silver mining stocks globally on Monday. Australia's Sun Silver Ltd. jumped as much as 21 per cent, while Silver Mines Ltd. gained nearly 13 per cent. Hong Kong-listed China Silver Group Ltd. rose 14 per cent before paring some gains.
As of 1:02 p.m. London time on December 1, silver traded 1.4 per cent higher at US$57.28 an ounce. Gold edged up 0.2 per cent to US$4,248.77 an ounce. The market continues to digest these developments alongside a recent hours-long trading disruption on the Chicago Mercantile Exchange, which forced some metals traders to revert to phone-based hedging last Friday.
