Silver Prices Surge Violently in January

After fluctuating at a high plateau at the end of December 2025, silver prices surged violently in January. According to the commodity market analysis system of Business Society, the silver market quotation on January 28, 2026, was 29,184.67 yuan/kg, representing an increase of 57.93% compared to the spot price peak of 18,480 yuan/kg at the beginning of the month (January 3). Today's sharp rise in silver is driven by a triple resonance of financial attributes, supply-demand gaps, and capital and technical factors, with the core being the strengthening of interest rate cut expectations, the outbreak of industrial rigid demand, and low inventory amplifying elasticity. The details are as follows:

I. Financial Attributes: Macroeconomic and Safe-Haven Resonance

Interest Rate Cut Expectations and Weakening US Dollar: Cooling US inflation and employment data have led the market to raise the probability of a Federal Reserve rate cut in June to 70%. The decline in real interest rates reduces the holding cost of precious metals. The US Dollar Index has fallen below 96 (a nearly four-year low), enhancing the attractiveness of silver priced in US dollars, creating a double boost from "rate cuts + dollar depreciation."

Gold Linkage and Gold-Silver Ratio Correction: The spot price of London gold has broken through $5,290 per ounce, and the gold-silver ratio has dropped to 45.5 (a nearly 13-year low). Silver has ample momentum for a catch-up rally, with capital flowing into silver driven by the spillover effect of the gold bull market.

Geopolitical and Safe-Haven Demand Heating Up: The ongoing Middle East situation, the Red Sea crisis, and rising risks of a US government shutdown have prompted investors to increase allocations to precious metals for hedging purposes, pushing up demand for allocation.

II. Supply-Demand Fundamentals: Structural Gap Continues to Widen

1. Rigid Constraints on the Supply Side

China implemented a "case-by-case review" control on silver exports starting January 1, reducing global supply by 4,500–5,000 tons (accounting for 60%–70% of global trade volume).

72% of silver comes from copper and zinc by-product mines, with independent expansion cycles of 5–10 years. Global mine silver production in 2026 is expected to decrease by 0.6% year-on-year, marking the fifth consecutive year of decline.

Extremely Low Inventory: LBMA deliverable inventory is only 233 tons, COMEX inventory is down 70% year-on-year, and global visible inventory covers only 1.2 months of consumption. Tight spot supply supports premiums.

2. Explosive Growth on the Demand Side

Photovoltaics: Global installed capacity in 2026 is projected to reach 600 GW. The penetration of N-type batteries is expected to drive silver usage to 210 million ounces, accounting for 34%–55% of industrial demand. Domestic restocking orders are scheduled until mid-February.

AI and New Energy: Silver usage in AI server chip packaging has increased by 35% year-on-year, while silver usage in new energy vehicle power batteries has grown by 28% annually. The "silver replacing copper" trend has added 300,000–500,000 tons of substitution demand.

Expanding Supply-Demand Gap: The global deficit in 2026 is projected to reach 203 million ounces (approximately 6,316 tons), marking the sixth consecutive year of shortage.

III. Capital and Technical Factors: Sentiment and Capital Resonance

Accelerated Capital Inflows: Silver ETFs increased holdings by 210 tons in January, and long positions in the futures market hit a record high, with speculative capital chasing the rally.

Technical Factors Reinforce the Trend: Daily charts show a bullish alignment, with Bollinger Bands opening upward and prices moving along the upper band. No significant divergence is observed, triggering trend-following capital inflows.

Futures-Spot Structure Support: Spot premiums persist, with spot prices catching up after futures lead the rally. Low inventory amplifies price elasticity, making short-term declines difficult.