Silver prices have recently surged. The daily increase approached 8%, causing the Chicago Mercantile Exchange to take action twice within two weeks by raising futures margin requirements, pushing the initial margin for the March 2026 contract to $25,000. But no matter how much they increase, they can't stop this wave of enthusiasm, which shows how crazy the market is.

The core issue is actually simple—supply and demand imbalance. Over 70% of global silver is not mined independently but is byproduct from copper, lead, and zinc mines. Theoretically, rising prices should stimulate the reprocessing of tailings and the release of production capacity (mainly electricity costs), but in reality, mine commissioning cycles are very long, and primary mineral output is constrained, making actual supply elasticity painfully low.

What's more aggressive is the policy front. Starting January 1, 2026, silver export controls will be upgraded, allowing only 44 compliant companies to export. Global supply will suddenly drop, and inventories in major demand countries like the US are already running low.

There are other driving forces. Demand for silver in fields like photovoltaics, AI, and new energy vehicles has suddenly exploded, with the global gap expected to expand to 8,000 tons. Plus, the shrinking share of the US dollar and rising expectations of interest rate cuts add to the mix. Silver has both industrial and monetary attributes, and the combination of these two advantages is powerful. In the short term, physical shortages and policy support are strong enough that even if regulators tighten further, silver prices are likely to hold. However, those using leverage should be cautious, as the risk of a sharp correction in high volatility is significant.