Silver Hits All-Time High, Then Reverses: What's Fueling The Frenzy?

The iShares Silver Trust (AMEX:SLV) surged to new records Monday morning, extending a historic rally that has pushed silver prices above $82 per ounce, before pulling back sharply during early Monday trading.

• iShares Silver Trust stock is taking a hit today. What’s behind SLV decline?

What To Know: This explosive move is primarily driven by an acute physical shortage in China, where a retail buying frenzy has collided with dangerously tight supply levels.

The scarcity is so severe that the UBS SDIC Silver Futures Fund LOF, China's only pure-play silver fund, was forced to restrict subscriptions on Friday after trading at a massive premium exceeding 60% relative to its underlying assets.

The frenzy has been exacerbated by Chinese social media platforms like Xiaohongshu, where viral posts circulating arbitrage tutorials have drawn waves of speculative retail capital into the market. This localized liquidity crisis has triggered a global structural shift, propelling the metal to its strongest annual performance since 1979.

Year-to-date, silver has gained approximately 140%, outpacing gold and equities as investors flee toward tangible assets.

Market analysts suggest this rally is supported by fundamental deficits, with industrial demand from solar panels and electric vehicles likely to test prices near $85-$100 per ounce.

While some experts predict a long-term target of $200, investors should remain cautious of volatility. The current melt-up mirrors the infamous Hunt brothers’ cornering of the market in the late 1970s, signaling potentially sharp corrections if the speculative fervor in Asia cools.

Benzinga Edge Rankings: Benzinga Edge rankings currently assign the ETF a Momentum score of 97.36 alongside positive price trends across short, medium and long timeframes.

SLV Price Action: iShares Silver Trust shares were down 9.41% at $64.43 at the time of publication on Monday, according to Benzinga Pro data.

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