Silver has rallied nearly 20% in August, touching $70 per ounce after the US Treasury announced changes to bond buyback operations. While high industrial demand from solar and electric vehicle sectors provides a base, the rapid price climb brings risks of increased volatility. Investors may monitor how the market handles current resistance levels and future macroeconomic data.
Silver prices have staged a strong comeback throughout August, gaining nearly 20% to reach the $70 per ounce mark by late in the month. In India, this move is reflected on the Multi Commodity Exchange (MCX), where futures for September delivery rose to approximately Rs 2,44,328 per kilogram. This rally marks the metal's strongest performance since mid-June 2026, putting it back in focus for many market participants.
The primary driver of this recent momentum is a shift in US fiscal policy. The US Treasury’s decision to double long-bond buyback operations has helped weaken the dollar and lower Treasury yields. Since precious metals are priced in dollars, a weaker currency often makes them more affordable for global buyers, supporting higher prices. Additionally, silver holds a unique position because it acts as both a safe-haven asset and an essential industrial material. The metal is seeing consistent demand from industries like solar energy, electric vehicle manufacturing, and AI infrastructure, which has contributed to a global supply deficit for six consecutive years.
This structural demand has not only lifted physical silver prices but has also provided a boost to silver mining equities, with several major producers recording double-digit gains during the month. However, while the long-term industrial case for silver remains a point of discussion among analysts, investors may note that a 20% jump in a single month is a rapid move. Silver is historically known for sharper price swings, or volatility, compared to gold, which can lead to quick corrections even during upward trends.
From a risk perspective, the $70 per ounce mark serves as a psychological barrier. Market participants are watching to see if the metal can maintain this level, as a failure to hold could trigger profit-taking by institutional traders looking to lock in recent gains. Furthermore, the market remains highly sensitive to US Federal Reserve monetary policy and upcoming inflation data. If economic reports suggest that interest rates may stay higher for longer than expected, the current rally could face pressure.
Investors tracking this space may want to observe how the price stabilizes in the coming weeks. Rapid rallies often require a period of consolidation before establishing a new trend, and chasing prices after a sharp ascent carries the risk of short-term volatility.