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According to the most successful precious metal and commodity investors, there is more than one reason behind the stratospheric rise in the price of an ounce of silver. Reaching an all-time record high $79.35 on the Friday trading day before the weekend, it capped off a head-spinning climb in price that began more or less after Thanksgiving when the it traded for a few days around $53.00.
One of those reasons will undoubtedly have been the advent of silver as a critical mineral, a designation applied to it by the US Geological Survey on November 27th, along with copper, an industrial metal that has also made a new all-time record high this year.
USGS defines a critical mineral as, “those commodities which are essential to the economic or national security of the US; have a supply chain that is vulnerable to disruption; and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the US”.
Among silver’s more recent roles is a part of the anode in Samsung’s new all solid state battery, which boasts superior duration, lifespan, and recharge time to lithium-ion batteries, as well as for the construction of data centers. 60% of silver demand comes from industrial use, and 60% of that, according to Rahul Sen Sharma, President and Co-CEO of Indxx Funds, is used just for the construction of data centers that back up artificial intelligence systems.
Gaining exposure to silver in the portfolio is a tricky business, because unlike gold, there are only a few major producers. Historically, says commodities investor Rick Rule, founder of Rule Investment Media, this has meant that investors are forced rather quickly to divert from the large-cap producers to mid and small-cap producers—basically anyone that has a silver mine that’s producing can see storybook gains far in excess of 1,000%.
On Monday, the upward surge in valuation of the grey metal has met something of a brick wall of a correction, with the spot price down close to 10% at publishing time. $3.00 had already been shaved off of silver two hours ahead of the opening bell, either from early trading or deliveries made in Asia on Sunday night.
But silver bulls are confidant that 2026 will see a long-awaited return to the silver screen for many of the mining stocks that spent years languishing with the metal around $20 per ounce, even as the price of gold inched upwards starting in 2024. Rule and others who’ve made their name around precious metals, including Peter Schiff, Don Durrett, Trey Reik, John Feneck, and Eric Sprott, believe silver is possibly still undervalued when measured by gold, and that the silver miners are underweight relative to the price of their product.
Pan American Silver Corp (PAAS), one of the few large-cap silver miners available on the NYSE, is up over 100% this year. Yet the price of silver is up even more. Once miners begin to fulfil deliveries according to the current prices, and the earnings on those prices are reflected in quarterly reports, some like PAAS and others may prove to be undervalued even after a 100% jump.
Even considering today’s correction, some junior miners are positive at publishing time, somewhat demonstrating that momentum is real, and that $80.00 silver, once the language of the most extreme speculators, seems more likely than not. WaL
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PICTURED ABOVE: Typical silver coins and rounds. PC: Zlaťáky.cz on Unsplash.
