Silver prices hit a record high of $93.75 per troy ounce, pushing the Gold/Silver ratio below 50 for the first time since 2012. This year, Silver’s price increased by about 30%, while Gold rose just 7%. Last year, Silver surged nearly 150%. US President Trump’s efforts to negotiate deals on critical minerals have temporarily reduced concerns about tariffs, leading to a drop in Silver prices of over 7% from their peak. With lower tariff risks, more Silver from COMEX has been shipped to China, where the supply is tight. Since October, 97.5 million ounces have left COMEX stocks.

Silver Market Dynamics

The Silver deliveries likely helped ease acute shortages in London’s market. China’s Silver inventory is at its lowest in a decade. The drop in COMEX inventories shows a tight Silver market, which contributed to the price surge in October. Now, Silver prices are stable with reduced tariff risks. A new Silver futures contract from the CME Group, launching on February 9, will have a 100-ounce lot size, making it more accessible to retail buyers. Current COMEX Silver futures use a 5,000-ounce lot size, which is less friendly for smaller investors. This new contract could increase market activity. Looking at market trends, we should see the current price movement as a pause after last year’s record rise. After reaching $93.75 in 2025, silver has pulled back to around $82 an ounce, indicating that fears about tariffs have lessened. Traders should expect ongoing high volatility, making strategies that capitalize on price swings more appealing.

Silver Supply And Demand

The tight supply that fueled the 2025 rally is still important to watch. Recent data from CME shows that registered silver inventories on COMEX are around 35 million ounces. While this is slightly up from the lows in late 2025, it is still more than 60% lower than last year. This limited supply suggests a strong floor for prices, indicating that any major dips could be brief. Industrial demand continues to support Silver prices strongly. Reports from late 2025 indicated a 15% year-over-year increase in demand, primarily from the solar and electric vehicle industries, and early projections for 2026 suggest this trend will continue. For traders in derivatives, this robust demand makes selling out-of-the-money puts a practical strategy to earn premiums, as a market crash seems unlikely. We should also consider new investors entering the market due to the introduction of the 100-ounce Silver futures contract last February. This contract sparked a wave of retail interest, contributing to the significant price changes we saw throughout 2025. The ongoing high trading volume means traders need to be ready for quick, sentiment-driven price shifts and adjust their strategies accordingly. Lastly, the Gold/Silver ratio remains an essential measure for relative value trades. After dipping below 50 during last year’s peak excitement, the ratio has stabilized around 55. This still represents a historically low level, highlighting Silver’s strength compared to Gold and opening up opportunities for spread trades between the two metals. Create your live VT Markets account and start trading now.

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