Spot silver climbs more than 3% to $87.49/oz

Spot silver climbs more than 3% to $87.49/oz

Spot Silver Surges Over 3% to $87.49/Ounce Amid Robust Demand and Supply Constraints

Spot silver prices climbed more than 3% on February 22, 2026, reaching $87.49 per ounce, driven by a confluence of industrial demand, monetary policy shifts, and geopolitical uncertainties. This rally follows a year of unprecedented growth, with silver surging over 150% in 2025 and maintaining momentum into early 2026.

Industrial Demand and Strategic Reserves The metal's critical role in advanced technologies, particularly in semiconductors and battery manufacturing, has intensified demand. The U.S. Department of the Interior's designation of silver as a critical mineral has further underscored its strategic importance. Additionally, companies in the AI and data center sectors are accelerating silver procurement to meet production needs. For instance, Hyperscale Data, a major data infrastructure firm, announced plans to acquire up to 100,000 ounces of silver to support its expansion.

Monetary Policy and Investment Flows Lower U.S. interest rates and expectations of further easing have bolstered demand for non-yielding assets like silver. Exchange-traded funds (ETFs) have played a pivotal role, with net inflows of 491 tons since October 2025, pushing total holdings to 26,263 tons. Analysts note that ETF-driven price sensitivity accounts for roughly 65% of silver's 130% increase since October 2025. Meanwhile, central banks have scaled back gold purchases, shifting focus to silver as a more accessible alternative for emerging markets.

Geopolitical and Supply-Side Pressures Physical silver reserves have declined due to sustained outflows from the London market, exacerbated by fears of a potential tariff war disrupting supply chains. In emerging markets, silver has gained traction as a cheaper alternative to gold, with buyers in India and China paying premiums of up to $10 per ounce over London prices.

Market Outlook and Risks While the rally has drawn comparisons to gold's performance, analysts caution that silver's higher volatility could lead to sharper corrections if momentum wanes. Claudio Wewel of J. Safra Sarasin notes that silver's physical supply deficit supports near-term strength but warns of larger drawdowns compared to gold. Societe Generale Commodities Research emphasizes that ETF flows remain a key driver, though central bank activity may moderate in the coming months.

The surge reflects a complex interplay of industrial, monetary, and geopolitical factors, positioning silver at a pivotal juncture in its long-term trajectory. Investors are advised to monitor supply constraints, ETF dynamics, and macroeconomic shifts as key determinants of future price action.