Silver's Explosive Rally: What Drove the Metal From $29 to $70 and What Happens Next

Core Insights - Silver experienced a remarkable rally, surging 137% from February 2025 to February 2026, with the iShares Silver Trust (SLV) climbing from $29.46 to $69.72 [1] - The volatility in January 2026, triggered by speculation regarding the Federal Reserve chair, led to a 17.5% selloff, testing investor conviction [1] - The current market sentiment around silver remains bullish, with retail investors showing signs of recovery after the January shakeout [1] Silver Price Action - Silver's 137% gain over the past year significantly outpaces its 176% return over the previous five years, compressing a typical five-year performance into just twelve months [1] - The metal briefly touched $95 before reversing during the January volatility, indicating extreme price fluctuations [1] - Year-to-date, SLV is up 8.2%, reflecting ongoing volatility beneath the surface [1] ETF Flows and Investor Sentiment - The iShares Silver Trust holds $51.5 billion in net assets with a 0.5% expense ratio, indicating strong investor interest [1] - Sentiment on Reddit fluctuated during the January crash, with posts highlighting both significant losses and gains from SLV put options [1] - By mid-February, sentiment had rebounded to a bullish range of 64-68, suggesting a repositioning among retail investors [1] Silver Miners Performance - Silver mining stocks have amplified gains, with First Majestic Silver (AG) returning 304%, Hecla Mining (HL) at 256%, and Coeur Mining (CDE) at 211% [1] - The valuations of these mining companies have expanded significantly, with First Majestic trading at 164x trailing earnings and Pan American Silver (PAAS) at 33x [1] Drivers of Silver Demand - Industrial demand for silver remains robust, driven by sectors such as solar panel production, AI infrastructure, and electronics manufacturing [1] - Central bank gold buying indirectly supports silver prices through the gold-to-silver ratio, highlighting the interconnectedness of precious metals [1] - Key factors to watch include the sustainability of industrial demand, miners' production management, and the behavior of retail investors post-January [1]