Commodities: Silver
Volatility has been extreme in precious metals of late, but in the bigger picture, we can see deficits and declining inventories suggesting silver is now increasingly vulnerable to periods of strong investment demand, which in turn could lead to further bouts of liquidity tightness. S32 is exposed to silver through its 100% interest in the Cannington mine in QLD, which produces silver, zinc and lead, and is one of the top 10 silver mines globally.
Silver exploded higher through 2025 with much fanfare but it wasn’t without volatility with three 15-20% pullbacks along the way. Both the exponential advance and crowded bullish optimism reminds us of lithium in 2022/3 and we believe the markets closer to a sell than a buy for at least another decent pullback.
Silvers explosive gains in the last 4 weeks have seen ETF buyers pivot away from gold into its cheaper cousin. Consensus expectations for gold in 2026 are constructively bullish, yet more modest than this year’s explosive +66% rally.
Silver ended the overnight session up more than 4%, trading at all-time highs, while Bitcoin fell well over 2%, no direct correlation here at the moment. The demand for silver is rising, while that of gold is easing, if we look at the respective lease rates, i.e. the gold lease rate is the interest rate paid to borrow physical gold, usually for a short period.
Metals surged in volatile trading on Friday, with silver and copper hitting fresh records, following a chaotic hours-long outage on CME Group’s Chicago Mercantile Exchange – the path of least resistance remains up. Silver jumped almost 6%, surpassing a peak set during a historic squeeze in the London market in October.
There’s little more to add to the silver story beyond what we’ve covered for gold, but silver also has significant industrial applications, plus at times it can be more volatile. The US-traded SIL ETF is a great vehicle to gain exposure to global silver miners, especially as they are thin on the ground on the ASX:
