Silver may soon challenge a major price level again. A sharp mix of industrial demand, supply stress, and renewed buying has pushed the metal toward $90 per ounce.
Gold, meanwhile, remains stuck in a narrow range. Inflation concerns have increased expectations for higher interest rates. As a result, gold has struggled to gain momentum. Silver, however, has a different story. Its industrial role now gives the market a powerful source of support.
Silver Rallies Alongside Record Copper Prices
Silver’s latest move comes as copper trades at record highs. July high-grade copper futures recently traded at $6.70 per pound, up more than 2% on the day.
At the same time, spot silver traded at $88.30 per ounce, also up about 2%.
In a Tuesday market note, Elior Manier, Market Analyst at OANDA, said silver has enough strength to test resistance near $90 per ounce. He noted that silver often follows gold. However, this rally looks different. In his view, the move reflects real demand and strong buying interest in alternative metals.
Industrial Demand Gives Silver an Edge
Silver still has an important monetary role. Yet industrial demand now carries more weight in the market.
Manufacturers use silver in many high-growth sectors. These include renewable energy, electronics, and electric vehicles. Therefore, any improvement in industrial activity can quickly support silver prices.
Moreover, analysts continue to point to China as a major source of demand. Renewed economic activity there has helped silver and other base metals.
Commodity analysts at TD Securities said recent buying from commodity trading advisers has slowed. Even so, they see signs of fresh demand from China. Top traders on the Shanghai Futures Exchange have bought silver steadily over the past month. Chinese premiums also remain strong. In addition, the import arbitrage has opened at times during the last two weeks. TD Securities said this suggests Eastern demand may be helping silver move higher.
Supply Problems Add More Pressure
The supply side also continues to support silver.
Copper demand has stayed fairly stable. However, prices have moved higher because the ongoing war in the Middle East has disrupted the global sulfur supply chain. Sulfuric acid plays a key role in base metal production.
This issue matters for silver as well. Miners often recover silver as a byproduct when they produce metals such as zinc, copper, and aluminum. Therefore, lower production of those metals can also reduce silver output.
That adds pressure to an already tight market. Analysts expect silver to record its sixth consecutive annual supply deficit this year.
Energy Crisis Supports Green-Metal Demand
The war in Iran has also deepened concerns about energy markets.
Julia Khandoshko, CEO of European broker Mind Money, said the energy crisis caused by the conflict will likely increase demand for alternative energy. That matters for silver because renewable energy systems require the metal. Electric vehicles also depend on silver for key components.
Khandoshko said silver remains in a long-term growth phase, despite market volatility. She also pointed to supply limits, logistics disruptions, and green-energy demand as major forces behind the market.
U.S. Dollar Strength Remains a Headwind
Silver still faces risks.
Higher interest rate expectations continue to support the U.S. dollar. A stronger dollar can weigh on silver and other commodities. Even so, the market’s momentum remains hard to ignore.
David Morrison, Senior Market Analyst at Trade Nation, said silver’s technical picture has improved. He noted that the daily MACD has turned sharply higher. That signal points to stronger upside momentum.
Morrison added that a break above $90 per ounce could shift trader attention toward silver’s January record high near $120 per ounce.
Trump-Xi Talks Could Shape the Next Move
Still, Morrison warned that politics may influence the next price move.
He said much depends on President Trump’s talks with Xi Jinping in China tomorrow. Traders will watch closely to see whether those talks can help resolve the U.S. war with Iran, along with other major issues.
For now, silver has momentum. Industrial demand remains strong. Supply concerns continue to build. China has returned as a key buyer. Together, these forces have put the $90 level back in focus.
If silver breaks that barrier, the market may begin looking toward much higher targets.
