The value of silver has risen by 159pc since the start of the year – Wei Leng Tay/Bloomberg
Silver is on track for its best year since 1979 as a Chinese crackdown on exports helps fuel a huge price rally.
The precious metal jumped by 6.29pc on Friday to hit an all-time high of $76.37 (£56.59) per ounce.
Silver has now risen by 159pc since the start of the year, more than double the 70pc rise in gold prices recorded so far this year.
Precious metals are considered a safe-haven asset and investors have been hoarding them this year in response to fears about inflation, geopolitical tensions and government debt.
More recently, a looming crackdown on exports from China has also sparked a scramble to get hold of silver.
From Thursday Jan 1, China will require exporters of silver, tungsten and the chemical element antimony to obtain licenses from the Ministry of Commerce (Mofcom).
The rules are expected to mean that only large companies will be granted licenses and the measures are expected to tighten global access to the metal.
China is the world’s second largest supplier of silver after Mexico, producing 3,300 metric tones in 2024. This was three times the United States’s silver output.
When it announced the new rules in late October, Mofcom said the measures were designed to “protect resources” and “strengthen the management of rare metal exports”.
Beijing’s rules will add to a massive imbalance between supply and demand. The world’s silver deposits are now largely depleted but there has been recent strong demand from both investors and industrial buyers, which use silver in the production of goods such as solar panels.
Recent interest rate cuts by the Federal Reserve have further boosted the relative appeal of precious metals, as interest yielding assets no longer hold such an advantage over gold and silver.
The market for silver is smaller than that for gold, which means that the precious metal is more prone to boom and bust.
This year’s rally recalls the Hunt brothers’ attempt to corner the market in the 1970s. Nelson and William Hunt, two Texas oil heirs, began buying silver at $2 an ounce after then-president Richard Nixon severed the dollar’s link to gold in 1971. By January 1980, the pair commanded much of the market and had pushed the price of silver to $50.
The market eventually crashed after the Commodity Exchange (Comex) in New York intervened to impose limits on trading. It prompted a 50pc price fall in a single day, which became known as Silver Thursday.
Silver and gold’s rally this year has helped precious metal mining companies boom, with shares in London-listed Hochschild Mining surging by 128pc.
The price of platinum, which is used in electronics and the automotive industry, has also climbed to record highs, rising by more than 40pc in the last month to trade above $2,400 an ounce.
