Industrial pressure, shrinking supply and investor demand have all conspired to push silver to around US $60.4 per ounce — a fresh high

The price spike reflects a surge in demand from industries (especially tech and “green” sectors) for silver’s metal properties — demand derived from growth in electronics, solar panels and EV-related manufacturing — even as global supply remains constrained, largely because silver is often a by-product of mining other metals, so production doesn’t respond quickly to rising prices. Meanwhile, investors and speculators, concerned about currency weakness, inflation and global economic uncertainty, have piled into silver as a “safe-haven” asset, boosting demand further and driving market price sharply higher.

Why has the price of silver hit a record high? - BBC News

1. Explain the concept of derived demand. Using the case of silver in the article, identify at least one example of derived demand and describe how it helps to drive the demand for silver.

2. Using a demand and supply diagram for the market for silver analyse how shifts in supply and/or demand could explain the recent silver price increase to record highs.

3. Discuss why price volatility in commodity markets, such as silver, occurs and why it can cause problems for industrial users of silver and for investors