Speculative Funds Combined with Supply Shortage, Silver Prices Reach Historic High
Amid multiple favorable factors, the silver market experienced a highlight moment this week. On Monday, spot silver prices rose by over 0.5% during the session, successfully reaching a record high of $67.5519 per ounce. This epic surge not only extends the strong momentum following October's historic short squeeze but also reflects the ongoing physical supply tightness in the global silver market.
Market data shows that speculative funds are accelerating their entry into the precious metals sector. Earlier this month, the total trading volume of Shanghai silver futures surged dramatically, nearing the levels seen during the market crisis months ago, indicating a high level of participation in the Asian market. Analysts point out that silver not only has financial hedging properties, but its solid industrial demand and low physical inventory levels provide a solid foundation for its record-breaking rally.
Geopolitical Tensions Ignite Risk-Averse Sentiment, Gold Price Nears Historical Peak
In addition to silver's striking performance, spot gold prices also remained steady. Currently, gold prices have climbed to around $4348.12 per ounce, just under $40 away from the all-time high of over $4381 recorded in October this year. The sharp deterioration of geopolitical situations has reignited investors' risk-averse buying. Recently, the U.S. announced stricter oil sanctions against Venezuela to exert more pressure on the Maduro government; meanwhile, Ukraine attacked a tanker belonging to Russia's "shadow fleet" in the Mediterranean for the first time. These actions have significantly increased the global energy and supply chain security premiums.
Under the shadow of geopolitical risks, interest-free precious metals tend to be more attractive. In addition to gold and silver, platinum continued its ascent following a strong 2.5% rebound last Friday, and palladium prices followed suit. The interconnected effect of the entire precious metals sector highlights the market's deep concerns over the current global unrest.
Rate Cut Expectations Reinforce Upward Momentum, 2026 Monetary Policy Outlook Supports Long-Term Valuation
The direction of monetary policy remains the "anchor" for precious metal prices. A series of economic data released last week failed to clear the market's fog about economic prospects, instead strengthening traders' bets on the Federal Reserve's easing path. The market generally expects the Fed to have room for two rate cuts by 2026. The persistent downward expectation of the interest rate environment significantly reduces the opportunity cost of holding precious metals, opening up room for their long-term rise.
In summary, the current precious metals market is in a favorable cycle of "risk aversion demand, supply tightness, and loose policy." Although the risk of high volatility remains, the strong pattern of gold and silver is difficult to reverse before the geopolitical stalemate and the rate cut cycle end. Investors are closely watching whether gold prices can break through the psychological threshold of $4381 in the short term, thus initiating a new upward phase.
