At the beginning of December, the non-ferrous metal market has a "historical high" situation.

On December 1st, the international silver price broke through the $57/ounce mark, reaching a historical high, with an increase of over 90% this year, making it one of the most dazzling commodities this year. Copper prices also set new records, while gold is also ready to spring into action amidst a sea of institutional optimism.

Silver supply and demand imbalance intensifies, prices reach historic highs

The silver market has shown strong performance, with Wind data showing that on December 1st, the international silver price broke through the $57/ounce barrier, setting a new high; COMEX silver first broke through the $58/ounce barrier; and the main contract of Shanghai silver rose by more than 7% during the day, reaching 13,520 yuan/kilogram, setting a new high. So far this year, the international silver price has risen by more than 90%, significantly outperforming gold.

This rise has been supported by two main factors: strong expectations of a December rate cut by the Federal Reserve and ongoing supply shortages.

The analysis points out that the recent market expectations for a rate cut by the Fed have increased, which has provided a solid support for silver and the entire precious metal market. The latest data from CME FedWatch tool shows that the market expects a 25-basis-point rate cut by the Fed in December with a probability of 87.4%. Moreover, the dovish Haselett is considered a potential candidate for the next Fed chair, which further enhances the market confidence in the future low-interest rate environment.

From the supply and demand perspective, the global silver supply has been in deficit in recent years due to the decline in silver production. Global exchange-traded silver stocks have fallen to multi-year lows, while demand in industrial sectors such as photovoltaics and electric vehicles continues to grow, further straining the physical market. In the lease market, short-term lease rates for silver have surged, highlighting the shortage of silver supply in the market.

Despite a record amount of silver flowing into the London market to alleviate a historic supply shortage, the one-month silver lease spread remains elevated. Data from the Shanghai Futures Exchange shows that silver inventories in designated warehouses have fallen to their lowest level in nearly a decade.

Paul Syms, head of fixed income and commodities exchange-traded funds at Invesco in Europe, the Middle East and Africa, said: “To meet urgent delivery demands, some institutions have had to switch to more expensive air freight as a substitute for conventional sea shipping to transport silver.” He believes that while prices have pulled back slightly from recent highs, the long-term momentum behind this leg of the move is different, and may allow silver to trade in a higher price range, and even strengthen further out.

Copper prices reach a new historical high, supply concerns drive market enthusiasm

LME copper futures, which were also synchronized with silver, have also set new records. The price of LME copper has recently refreshed the historical high point, and the market is highly optimistic. Well-known "copper bull" analysts have once again published bearish predictions, warning that the recent large-scale metal transfer潮 to meet US demand may lead to a rapid drawdown of copper stocks in other parts of the world, thus opening up space for copper prices to further rise.

Analysts from Rabobank Financial, a subsidiary of ANZ Bank, pointed out in their latest research report that the market narrative of a tightening copper supply is gaining widespread acceptance. However, the analysts also cautioned that the copper price still lacks a decisive catalyst to drive a breakthrough rally, making it highly sensitive to incremental bullish signals, including improvements in downstream demand and supply disruptions at small and medium-sized mines or smelters. The report predicts that the LME copper price will remain sensitive to small upward movements and maintain an upward trend.

Jiangxi Copper Industry takes overseas acquisition, the competition for copper mine resources intensifies

Notably, on November 30th, Jiangxi Copper released a significant announcement, indicating that the company has submitted two non-binding cash offers to SolGold Plc, a London Stock Exchange listed company, proposing to acquire all of its shares at a price of 26 pence per share. Currently, Jiangxi Copper already owns 12.19% of the company, but the acquisition proposal has been rejected by the target company's board of directors. The company stated that it reserves the right to make a formal offer, but the specific progress is uncertain. According to the City Code of the United Kingdom, Jiangxi Copper is required to issue a formal offer announcement or explicitly abandon the acquisition before December 26, 2025.

Institutions are generally bearish on gold, with prices potentially breaking through the $5,000 mark.

The gold market has also been strongly viewed as a good investment by institutional investors. So far this year, the price of gold has increased by about 57%, making it one of the best performing years in decades. This rise has been driven by a number of factors, such as central banks increasing their purchases, persistent inflation, and concerns among investors about the strength of the US economy and tariff issues.

A survey of more than 900 institutional investor clients conducted by global investment bank and financial services company Goldman Sachs on its Marquee platform found that the largest group of respondents (36%) expects gold to continue its upward trend and break above $5,000 an ounce by the end of 2026. A further 33% of respondents expect gold prices to rise to between $4,500 and $5,000 an ounce.

Goldman Sachs said that a combined 70% of institutional investors surveyed expect gold prices to continue to rise next year, with only slightly more than 5% of respondents believing that prices will fall back into the $3,500-4,000 range in the next 12 months.

Source: Caixin Finance, Global Market Report, CCTV Finance, etc.

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