Silver Surges 71% and Still Rising: Hotter Than Gold for Next Year

Spot Silver Price Hits $57 per Ounce
Gold Price Rises by 54%

This year, the international silver price surged by 71%, surpassing the rate of increase in gold prices.

According to the U.S. business media outlet CNBC and others on December 1, the popularity of safe-haven assets has soared this year amid global economic uncertainty, leading silver prices to rise sharply alongside gold.

An official is showcasing silver bars at the Korea Gold Exchange in Jongno-gu, Seoul.

In particular, the international spot price of silver reached $54.47 per troy ounce (about 31.1g) in mid-November, marking a 71% jump compared to the beginning of the year. During the same period, the increase in gold prices was 54%.

According to Bloomberg, after a temporary decline in mid-October, the spot price of silver rebounded and set a new record, trading at $56.2 to $57.6 per ounce as of 10:20 a.m. on December 1, Korea Standard Time.

This is the third time in the past 50 years that silver prices have reached record highs. The first was in January 1980, when the American oil tycoon Hunt brothers attempted to corner the market by controlling one-third of the world's silver supply. The second was during the U.S. debt ceiling crisis in 2011, when the popularity of gold and silver as safe-haven assets exploded.

Paul Sims, who oversees commodity products at the U.S. financial investment firm Invesco, told CNBC in an interview, "There are cases where silver has to be transported by airplane instead of container ships to meet delivery demand," adding, "In the long term, silver is likely to maintain relatively high prices, and there is a strong possibility that prices will rise further in the near future."

CNBC analyzed that the sharp rise in silver prices this year is due to a combination of factors. Chronic supply shortages have coincided with increased demand. Moreover, due to the supply shortage, there are forecasts that silver prices will continue to rise next year. First, over the past decade, production at silver mines in Central and South America has declined, leading to ongoing supply constraints. In addition, surging demand in India, the world's largest silver consumer, is further pushing up silver prices. In India, about 4,000 tons of silver are consumed annually, as silver is widely used for jewelry, ornaments, and tableware, and is also favored as an investment vehicle.

Growing demand for silver in manufacturing is also one of the main reasons for the price increase. Due to its excellent electrical and thermal conductivity, silver is used in a wide range of advanced industries, including electric vehicles, artificial intelligence (AI) components, secondary batteries, and solar panels.

Sims of Invesco said, "Silver straddles the line between precious metal and industrial metal," adding, "As the world and technology shift from fossil fuels to electric energy, as seen in batteries and solar power, the value of silver will continue to rise."