Silver tops US$80 for the first time in historic year-end rally

Weaker US dollar, rising geopolitical tensions add to appeal of precious metals

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Silver smashed through US$80 an ounce to an all-time high, extending a breakneck end-of-year rally powered by speculative trades and a persistent mismatch between supply and demand.

The white metal spiked as much as 6 per cent on a roller-coaster ride that took it to US$84 an ounce early on Dec 29, then sent it plunging below the previous close, before it recovered. A weaker US dollar and escalating geopolitical tensions have added to the appeal of precious metals during a bull run that has also taken gold and platinum to all-time peaks.

The rally on Dec 29 came after a comment by billionaire Elon Musk over the weekend that highlighted the growing investor frenzy around precious metals. Mr Musk replied to a tweet on Chinese export restrictions by saying on X: “This is not good. Silver is needed in many industrial processes.”

The Chinese measures are effectively a rollover of previous policies and were first announced by the Ministry of Commerce on Oct 30. Though China ranks among the top three global producers of silver — largely as a byproduct of industrial metals — it is also the world’s largest consumer, and therefore not a major exporter.