Published: January 16, 2026 by Florian Grummes
Precious metal prices have made a furious start to the new trading year. While the gold price recently reached another slightly higher high at $4,642, silver is the focus of market activity: with impressive price gains, the metal is currently leaving all other asset classes far behind. Since the beginning of the year, the price of one troy ounce of silver has risen by around 30% and marked a new all-time high of $93.69.
At the same time, the situation on the silver market is becoming dramatically more acute, and the sharp price rally has triggered considerable unrest in the banking world. Many institutions are said to have issued uncovered silver derivatives – financial instruments that pose serious risks in the event of further price increases.
Global annual silver production is approximately 800 million ounces, while large international banks hold short positions of approximately 4.4 billion ounces – an enormous leverage. With a silver price of around $90, this results in a potential liability of around $390 billion, more than the market capitalization of many international major banks.
Paper price versus physical price
Precious metal premiums in China, from January 16, 2026. ©Inproved
In addition, a gap is increasingly opening up between the paper price and the actual market price for physical silver. Silver is currently trading in China at approximately $103.90 per ounce, which corresponds to a premium of approximately 12% on the LBMA reference price.
Silver boom hits the solar industry hard
Silver share of solar module production costs, from January 16, 2026. ©Bloomberg
Traders are reporting supply bottlenecks and delays of several weeks, while recycling flows are drying up and investors are hoarding their metal. Industrial demand from sectors such as solar energy, semiconductors and electromobility remains high – and hardly reacts to the price increase. However, rising silver prices are increasingly putting pressure on solar cell manufacturers.
Thanks to a tripling of silver prices within a year, silver now accounts for around 29% of the production costs of solar modules, compared to just 3.4% in 2023. The sharply rising silver prices are further exacerbating the pressure on manufacturers as they attempt to return to profitability after more than two years of heavy losses and fierce competition in the industry.
New commodity supercycle
Stocks versus commodities, from January 16, 2026. ©Incrementum
All of this points to the beginning of a historic upheaval, which could potentially bring about the collapse of the paper market for precious metals and the start of a new commodity supercycle. Should the silver price rise again above $93, a “force majeure” event – i.e. the insolvency of a major short player – could drive the silver price to $150 overnight in an extreme case.
A new decision by the US government is also causing a stir. The US Department of Defense recently announced financial support for a planned smelter in Arizona, which is primarily intended to serve the Scottsdale Mint and process both silver and metal concentrates.
The USA will thus secure a 40 percent stake in the plant after contributing 2 billion US dollars to the total 7 billion US dollar project.
This could be another attempt by the Trump administration to regain strategic control over the commodity and precious metal supply chain – especially in times of growing geopolitical tensions and global commodity shortages.
Silver – Psychological price target at 100 US dollars
Silver in US dollars, daily chart from January 16, 2026. ©GOLD.DE
The silver price has known no bounds since the historic breakout above USD 50 last October. Although there was a sharp but very short-lived setback after the rise to USD 54.46 at that time. However, the actual breakout movement then began, which continues to this day. Silver has risen from 45.51 to a recent 93.69 US dollars, an increase of 106% within two and a half months!
Despite the extremely overbought situation on all time units and the incredible euphoria, an end to the rally on the silver market is not yet in sight.
From a psychological point of view, silver obviously wants to see the 100 US dollar mark. This is in line with our repeatedly mentioned 1st price target for the breakout movement, which we had derived from the cup-and-handle formation. In the long-term picture, price targets in the range between 250 and 500 US dollars can also be calculated from this formation.
In the short term, volatility has continued to increase dramatically. For example, in the night from Tuesday to Wednesday, there was a sharp setback from $93.51 to $86.42 (-7%) within a few hours. Accordingly, additional purchases at the current level are very risky and no longer have a good risk/reward ratio. Nevertheless, the silver price can continue to march upwards in this environment.
The daily stochastic has already switched back to the embedded super-bullish state and has tightened the upward trend. You should only slowly become cautious if the price falls below 86 US dollars. A fall below 80 US dollars would probably herald the beginning of a larger correction, the target of which would then be the rapidly rising 50-day line (64.45 US dollars). However, we remain bullish for the time being and suspect that the silver price would like to see at least the 100 US dollar mark. A march towards 125 to 150 US dollars cannot be ruled out either.
Conclusion: Silver – On the way to the $100 mark
Silver is the dominant topic on the financial markets and, with an increase of over 30% since the beginning of the year, has almost daily provided new historical records.
While the gold price is stagnating somewhat, the sharp silver rally is triggering alarm in the banking world, as large financial institutions are sitting on huge short positions.
Should the silver price soon overcome its new all-time high of $93.51, there is not much standing in the way of an increase towards the psychological mark of $100.
Author: Florian Grummes
Precious metal expert and technical analyst
www.goldnewsletter.de
