Precious metals surge on supply tightness and AI power demand

Silver is breaking out to two-month highs with aggressive momentumThe empirical fact that winners keep winning over the medium term., while gold consolidates near record levels. Traders point to a convergence of supply-side pressures and demand drivers: China's ban on sulphuric acid exports has cut off leaching acid for copper and silver mining, while simultaneous demand from AI data center infrastructure is pulling copper to fresh 3-month highs near $13,600 per tonne, only 6 percent below January's all-time peak.

Technical analysts cite a major wave-2 low in silver having established a strong base, with the next target at $91.50 according to market commentary. The momentumThe empirical fact that winners keep winning over the medium term. is fueled by retail accumulation and fund positioning shifts, as traders recognize that every megawatt of hyperscale data center infrastructure requires approximately 27 tonnes of copper for transformers, substations, power distribution, cooling systems, and grid expansion. This structural demand collision with China's export restrictions is tightening supply markedly.

The gold-silver ratio is in focus, with some traders betting silver will continue to outperform on its higher industrial leverage to data center capex. Miners including Pan American Silver, Agnico Eagle, and junior explorers are rallying. Some analysts also note that China's Zhaojin Mining is scouting gold acquisitions in Africa and Central Asia, suggesting that even Chinese entities see value in precious metals at current levels and are positioning for a prolonged tightness.

The risk is that if data center capex disappoints or if China reverses the sulphuric acid ban in response to domestic economic pressure, the supply story could reverse suddenly. Also, if real rates surge (should inflationThe rate at which prices rise across an economy. surprise higher Wednesday), precious metals could face headwinds despite supply tightness.