This week, silver approached $80 per ounce for the first time, with its rapid surge far outpacing that of gold. On the 27th, Elon Musk voiced his concerns, stating plainly that this is "not good" for industrial development. Musk made these remarks on the social media platform X. Commenting on discussions about silver prices exploding due to a "severe global supply shortage," Musk noted:

"This is not good. Silver is needed in many industrial processes."

Analysis indicates that the global silver market has been in a structural deficit for five consecutive years, with physical inventories depleting rapidly and stock levels at major exchanges plummeting significantly. The market is facing a real-time supply squeeze, not merely a rally driven by safe-haven sentiment. Silver is not only a precious metal for investment but also a critical raw material for solar panels, electric vehicles, electronics, and medical devices. As the proportion of industrial demand within total demand climbs to between 50% and 60%, supply-side bottlenecks are forcing prices into a near-vertical ascent, heightening anxiety from financial institutions to physical manufacturers. The fissure in the silver market's supply and demand is widening. Data for 2025 shows global silver demand reached 1.24 billion ounces, while supply was only 1.01 billion ounces, indicating a supply gap of 100 million to 250 million ounces. This situation is described as a "structural deficit," with no signs of a quick fix. The core reason for this predicament lies in the rigidity of mine supply. Most silver is a by-product of copper and zinc mining, new mines typically require over a decade to develop, and ore grades are declining. Meanwhile, incremental supply from recycling is insufficient to fill the gap, leaving the supply side struggling to keep up with soaring demand. An even more severe signal comes from the sharp drop in inventory data. Since 2020, COMEX silver inventories have fallen by 70%, and stocks in London vaults have decreased by 40%. At the current rate of demand, available silver inventories in some regions could last only 30 to 45 days. Market analysis also points to an extreme imbalance between "paper silver" and physical silver. It is estimated that the ratio of paper trading to physical silver is as high as 356:1, meaning there are hundreds of paper claims for every single ounce of physical metal. This disconnect heightens market fragility. If even a small fraction of buyers were to demand physical delivery, the existing system could risk collapse. Market participants are already aware of this risk, which is a significant factor behind the recent vertical price movement. Banks and institutions are reacting to the supply constraints, physical shortages, and potential risks in the paper market. Musk's concerns stem primarily from silver's central role in modern industry. Unlike gold, silver is not just a safe-haven asset but an industrial metal. Beyond its use in electric vehicles, silver is indispensable in the photovoltaic industry, electronic components, and medical devices. Industrial applications now account for half of total silver demand. Given the lack of effective substitutes in many applications, industrial buyers are less sensitive to price but extremely vulnerable to supply shortages. As Musk stated, such violent price fluctuations indeed pose a severe challenge for industries reliant on these critical raw materials.