Elon Musk Warns of Impact on Manufacturers Amid Surge in Silver Prices
Silver prices surged to a record high in December, reaching about $79 per ounce, up from around $56 at the start of December and significantly above early 2025 levels of $29 per ounce. This sharp increase is attributed to several factors, including China's new export restrictions on silver, effective January 1, which have heightened supply concerns and fueled broader safe-haven demand.
Elon Musk warned on X that rising silver prices could negatively affect manufacturers since silver is essential in many industrial processes. Key industrial uses for silver include electrification, solar panels, electric vehicles, and data centers. Rising demand in these sectors has notably depleted available silver inventories.
Analysts point to expectations of Federal Reserve rate cuts in 2026 as a driver boosting demand for hard assets like silver. Moreover, a persistent supply-demand imbalance and investor interest in precious metals amid inflation fears have contributed to what some describe as a generational bubble in silver prices.
Bloomberg reported that much of the readily available silver inventory is currently held in New York, awaiting a US Commerce Department review of critical mineral imports, which could result in tariffs or other trade restrictions. Meanwhile, gold and silver are on track for their best performance since 1979, with gold rising over 70% this year to above $4,500 per ounce. Platinum and palladium have also seen gains, driven by tight supply, tariff uncertainties, and investment rotation from gold.
These developments highlight the complex interplay between industrial demand, geopolitical trade policies, and investor behavior shaping the silver market and its implications for manufacturers worldwide.
