Silver's record break above $60 shows how central the metal has become to the AI build-out

• Silver blasted past $60 per ounce as AI data-center demand goes vertical.
• A supply crunch and surging industrial demand are fueling one of 2025's most dramatic rallies.
• AI's global expansion is turning silver into a vital material for the digital economy.

Silver blew past $60 per troy ounce for the first time on Tuesday, extending its blistering rally as traders race into a metal increasingly linked to the build-out of AI infrastructure.

The milestone caps a stunning run in 2025: silver has more than doubled this year, far outpacing gold's roughly 60% gain and leaving many traditional commodity forecasts in the dust.

While expectations of further Federal Reserve easing have helped fuel the move, surging industrial demand and persistent supply tightness are also powering silver's fierce price gains.

Veteran Wall Street strategist Ed Yardeni wrote on Tuesday that silver's explosive rally can't be understood without acknowledging its growing importance to the AI economy.

As AI data-center construction accelerates and chip demand rises, he argues the metal has effectively become "another AI play."

Industry association The Silver Institute and Oxford Economics reinforced that view in a report released on Tuesday, saying AI's rapid expansion is helping drive growing demand for silver across digital economy applications.

"As digitalisation and AI adoption accelerate, so too does the demand for critical materials involved in their applications — silver a critical one among them," they wrote.

Data centers increasingly rely on next-generation chips such as GPUs and TPUs equipped with high-performance semiconductors that use silver in their internal connections and packaging, the association wrote.

And as AI moves into autonomous vehicles, robotics, and edge devices, the broader electronics ecosystem is set to draw even more heavily on silver-rich components.

Beyond AI demand, silver remains entrenched in a tight market, with inventories strained and borrowing rates still high despite some easing after October's historic squeeze.

"This is unquestionably a tight market, stocks are falling, and traders want whatever scraps of silver they can get their hands on," wrote Chris Weston, the head of research at Pepperstone, in a Tuesday note.

He added that retail traders are taking sharp notice of silver's surge, and for good reason.

"It is an emphatic move, with trend and momentum accounts absolutely bossing the show," wrote Weston.

Despite its red-hot rally, the silver trade remains a risky one, Goldman Sachs cautioned in October.

Silver is far more cyclical because of its heavy industrial use, making it a less reliable hedge than gold, the bank said. It also lacks the support of central-bank buying that underpins the yellow metal, Goldman added.