Silver market continues to break through new heights, with spot prices reaching a historic high of $94 per ounce this week, soaring over 200% compared to the same period last year. However, an interesting phenomenon is that speculative funds are quietly retreating.

According to the latest trading data, as of mid-January, hedge funds and large speculators' net long positions in silver have dropped sharply by 15%, down to 15,045 contracts, the lowest in nearly 22 months. Why would funds withdraw when prices are high? The reason is simple: policy uncertainty. The current U.S. president's stance on tariffs is still uncertain. Although there has been no comprehensive tariff increase on key minerals including silver, the "room for discretion" in statements is enough to unsettle the market. This unresolved policy environment, combined with supply concerns for precious metals, has become the behind-the-scenes driver supporting silver's high-level oscillations.

The real casualties are the solar energy industry chain. Silver, as a key material in silicon solar modules, has seen its cost share surge from a low in 2023 to nearly 30%. Prices doubling naturally lead to rising costs, causing many manufacturers to fall into losses. The industry's response strategies mainly include two approaches: one is accelerating technological transformation to reduce silver paste usage; the other is seeking alternative materials. During this transition, copper has taken the opportunity to rise, with an increase of up to 40% within a year, becoming the biggest beneficiary.

Tight silver supply, demand support, and policy uncertainty form a triple play, suggesting that the high-level trend of this precious metal may still have room to run in the short term.