What is the underlying logic behind the historical peak of Baiyin Station?

Since the beginning of this year, the international silver price has broken through the $95/ounce mark, setting a record high, with an increase of over 18% in half a month. The silver inventory in the London vault is only enough for 1.2 months of global use, and the spot market is experiencing a "silver war". The current surge in silver prices is not simply a capital speculation, but a dual resonance of its financial and industrial attributes, coupled with profound changes in the global geopolitical landscape, monetary policy, and supply and demand structure, jointly pushing this traditional precious metal to reach new heights of value. The price breakthrough of silver is essentially the inevitable result of the revaluation of scarce strategic resources under the global economic transformation and financial system reconstruction.

The strengthening of financial attributes brought about by the Federal Reserve's shift in monetary policy is the core driving force behind the soaring price of silver. At the beginning of 2026, Federal Reserve officials collectively released dovish signals, and the market generally expected three interest rate cuts throughout the year, directly causing the US dollar index to fall to a low of 98.85. The natural attribute of silver being priced in US dollars has made the weakening of the US dollar a direct catalyst for its price increase, while the decline in interest rates has significantly reduced the opportunity cost of holding silver. A large amount of funds have shifted from fixed income products such as deposits and bonds to the precious metal market. Data shows that the world's largest silver ETF, iShares Silver Trust, increased its holdings by over 30 tons in a single week, with its holdings climbing to 16073.06 tons. Central banks around the world are also accelerating their allocation of silver to hedge against US dollar credit risks, and the monetary nature of silver is being reactivated in a loose liquidity environment.

The outbreak of industrial demand driven by the new energy revolution has provided solid fundamental support for silver prices. Nowadays, silver is no longer just a jewelry and safe haven asset. Its excellent conductivity and thermal conductivity make it a core raw material for new energy and digital economy, with industrial demand accounting for over 58%. The photovoltaic industry is the largest "silver swallowing giant", with a global photovoltaic installed capacity expected to exceed 600 gigawatts by 2026, corresponding to a silver demand of over 5000 tons, accounting for more than 55% of the global total demand. Even if photovoltaic companies try to "replace silver with copper", the popularity of N-type batteries still maintains a steady growth in silver demand. The development of new energy vehicles and AI data centers further opens up the demand space for silver. The silver consumption of an electric vehicle is 71% higher than that of traditional cars, and the chips and connectors in data centers also create a massive demand for silver.

The continuous decline in global silver inventories and supply chain distortions have exacerbated market supply and demand anxiety, becoming the trigger for price surges. As of January 2026, silver inventory on the Shanghai Futures Exchange has fallen to a nearly ten-year low, and explicit inventory on the London and New York Exchanges has also dropped to multi-year lows, resulting in an extreme scarcity of liquid silver available for delivery. Affected by market expectations that the United States may impose tariffs on silver, global silver resources are flowing towards the US market, leading to a shortage of inventory in traditional trading centers such as London. Gold and silver banks and traders are hoarding spot goods, further pushing up the premium in the spot market. At the same time, although the amount of silver recovered has reached a 13 year high, the growth rate is weak and difficult to make up for the gap. The cycle of adding new production capacity in mines is as long as 5-10 years, and the slow response of the supply side is in sharp contrast to the fast growth of the demand side, which continues to raise market expectations for the scarcity of silver.

The historical peak of silver prices also reflects the restructuring of the global strategic resource valuation system. Driven by both carbon neutrality and the digital economy, silver is transitioning from a traditional precious metal to a strategic industrial resource. Its value is no longer solely determined by risk aversion, but rather more anchored to the development pace of emerging industries such as new energy and AI. In this round of upward trend, silver's increase far exceeds that of gold, which is a direct reflection of its industrial property value being revalued. Of course, there is also a problem of short-term speculative overheating in the current silver market. More than 40% of COMEX silver futures are short-term speculative funds, and severe overbought in the technical aspect also poses a risk of price correction. Technological substitution attempts in the photovoltaic industry may also suppress long-term demand to some extent.

In the long run, the price trend of silver will still be determined by the supply and demand structure and global economic fundamentals. Against the backdrop of unchanged interest rate cuts by the Federal Reserve, continued growth in the new energy industry, and a complex global geopolitical landscape, the dual nature of silver will continue to provide support. But this price surge also reminds the market that the revaluation of silver is a long-term process, and the price fluctuations caused by short-term capital speculation cannot change its core value as a strategic resource. Behind the historical peak of silver is a microcosm of the global economy's transition from traditional growth to green and digital, and the reconstruction of resource value brought about by this transformation is the key to understanding the trend of silver prices.