Silver prices are at new all-time highs, with the precious metal extending last year’s landmark rally into 2026. U.S. physical silver rose 5.9% on Monday, pushing the price to $109.1. Meanwhile, US silver futures rose 7.5% to above $108.8. The metal soared 150% in 2025, outpacing gold’s record rally. Claudio Wewell, FX strategist at J. Safra Sarasin Sustainable Asset Management, said silver’s central role in chip and battery manufacturing, coupled with its recent recognition as a critical mineral by the U.S. Department of the Interior, is helping to maintain its momentum. Whewell noted that silver’s high conductivity, its important role in the semiconductor sector, and fears of being embroiled in a potential tariff war have all put a firm focus on supply-side risks among investors, which led to physical outflows from the London market and a decline in local silver reserves last year. XAG=1M Mountain US Spot Silver. At the same time, the asset’s role as a monetary metal is also accelerating, he added. “Compared to other products, its storage costs are low, and the metal has a long history of being the primary material for coin minting,” Wewell said in a memo Monday. He also pointed to its growing popularity among low- and middle-income buyers in emerging markets, who are now looking to silver as a cheaper alternative after rising prices have lowered the price of physical gold. “Household demand is recovering in India and China. In Shanghai, buyers are paying a premium of about $10 on top of the London price per ounce,” he added. ‘Uncharted territory’ Société Générale Commodities Research has highlighted exchange-traded funds (ETFs) as a key driver of silver prices since last year. Analysts at SocGen said ETFs have accounted for much of the price movement in both gold and silver since October, although central bank purchases may be starting to recede. “Silver tends to have fewer weeks with consistently positive inflows, but since October 2025 there have been 491 tonnes of net inflows, with total holdings now at 26,263 tonnes,” SocGen analysts said in a comment on Monday. @SI.1 1M Mountain US Silver Futures. “Since October 2025, price sensitivity to ETF flows has been measured at 13.6%, which explains approximately 65% of the 130% rise in silver prices since early October.” Nick Pucklin, investment analyst and Coin Bureau co-founder, said silver and gold have now entered “uncharted territory,” adding that the broader macro context supports further momentum for both metals. “At this point, retail FOMO is likely to set in as investors who missed the metals rally to date are flooding into the market,” Pucklin said in a note, noting the AI boom as the main driver behind the “unprecedented” demand for silver. Looking ahead, Mr. Wewel cautioned against the current rally, suggesting that silver’s risk-return balance could be upset if current momentum is derailed. “While physical supply shortfalls should support high silver prices in the near term, we caution that silver typically experiences much larger drawdowns than gold after extended rallies due to its high price volatility,” he added.