This morning, I was watching the market and I was completely stunned—gold surged to $4530, and silver skyrocketed 11% in a single day. Such a rapid increase is rare even in the long course of history.

Let's look at how exaggerated the data is: Silver COMEX futures soared 11.15% in one day, closing at $79.68; this week alone, it has already increased by nearly 20%, and from the beginning of the year until now, it has risen by a full 139%. Gold hasn't been idle either, with spot prices breaking through $4530, up over 4% for the week, and an annual cumulative increase of 68%. Other precious metals are also jumping on the bandwagon—platinum up 10.31%, palladium up 14.24%—the entire market is in a state of frenzy.

In summary: all precious metals are hitting new all-time highs, and silver's gains even surpass those of gold.

How did this wave of market movement come about? Several driving factors are working together.

The first is the Federal Reserve's policy expectations. The market generally expects the Fed to continue cutting interest rates until 2026, with two more cuts anticipated. When the Fed cuts rates, the dollar inevitably weakens—after all, the appeal of holding dollars diminishes. Gold and silver are both priced in USD, so a devaluation of the dollar automatically increases the value of these commodities. In other words: the money in your hand is becoming less valuable, and everyone wants to convert assets into hard currencies that preserve value.

The second factor is the ongoing escalation of geopolitical risks. The US sanctions on Venezuelan oil tankers, Saudi Arabia launching airstrikes in Yemen... Whenever there is turbulence in international affairs, safe-haven funds flood into traditional refuges like gold and silver. This is an instinctive market reaction—during chaotic times, gold has always been the safe haven, a rule that has held true throughout history.

The third, more interesting factor is the sudden explosion in industrial demand for silver. The global expansion of the photovoltaic industry, the surge in power consumption by AI servers, the skyrocketing production of new energy vehicles—all these emerging industries require large amounts of silver. But the problem is, global silver inventories have fallen to their lowest levels in ten years. Industry rushes to buy, investors chase the rally, and tight inventories create triple pressure—how can prices not rise?

There is also a more direct catalyst: a physical shortage in the London silver market. Short sellers are forced to cover positions to replenish supplies, further pushing up prices. Retail and institutional investors are all chasing the rally, market sentiment has completely spiraled out of control, forming a self-reinforcing upward cycle.

From a macro perspective, this wave of precious metals market reflects changes in expectations across three levels: dollar devaluation, global safe-haven demand, and industrial demand. For traders focused on asset allocation, this is also a signal worth contemplating.