Silver price rallied to a fresh all-time high on Friday as a slump in Chinese inventories heightened supply concerns. This comes a few weeks after the recent silver squeeze in London that pushed prices to the record high hit in late October.
Besides, bets on a 25-basis-point rate cut during the Fed’s December meeting have favoured the white metal. At the time of writing, silver price was trading at an all-time high of $55.52.
Slump in Chinese inventories heightens supply concerns
Silver price has hit a fresh all-time high as the market digests the slump in Chinese inventories. Recent data shows that silver stockpiles at warehouses linked to the Shanghai Futures Exchange hit the lowest level since 2015. This follows the large shipments directed to London to ease the silver squeeze that bolstered prices to a fresh record high.
At the same time, volumes at the Shanghai Gold Exchange hit an over 9-year low. This is after the record export of 660 metric tonnes in October.
In addition to China’s move to back up London stockpiles, industrial demand from the key importer and consumer of the white metal has continued to support prices.
On the one hand, its industrial profits plummeted in October by 5.5% YoY. Besides, its growth momentum slowed in Q3’25, with the economy expanding by 4.8%. However, it remains on track to hit its growth target of 5% this year. Besides, policymakers are considering fresh stimulus measures aimed at boosting domestic demand.
Silver prices have also been bolstered by the dramatic surge in Chinese solar installations. Data from the country’s National Energy Administration (NEA) showed that an additional solar capacity of 12.6 gigawatts was installed in October. The figure is 30% higher than the previous month. At that pace, 2025 solar installations are expected to match 2024’s record annual increase of 277 gigawatts.
Additionally, increased bets on another Fed interest rate cut before the end of the year have continued to support silver price. Despite the differing opinions among the central bank’s officials, investors appear to lean towards the dovish sentiment that the US labor market is weak enough to warrant a rate reduction in December.
Similar to other precious metals, silver price tends to thrive in an environment of lower interest rates. Besides, US dollar has had its recent gains curbed by the persistent economic uncertainties, an aspect that has further boosted the white metal’s safe-haven appeal.
Silver price technical analysis
Silver price is set to record a weekly gain, having traded in the green for four out of the week’s five trading sessions. On Friday, it extended gains from the previous session, hitting and surpassing the arch of the recently formed double top pattern to hit a fresh all-time high.
In the short term, the bulls will strive to hit $56. Extrapolating from the current RSI of 68, the rallying may push it into the overbought territory. With the subsequent pullback, $50 will be a support level worth watching.
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