Silver surged 12.5% on Monday to $116 an ounce—the largest single-day gain since 2008—as Swiss financier Egon von Greyerz declared the metal's breakout is only beginning amid a fundamental shift from paper trading to physical demand.
What Happened: Physical Demand Reshapes Silver Market
Von Greyerz, founder of Matterhorn Asset Management, said in a market update that silver is undergoing a structural transformation unlike the speculation-driven rally of the 1970s.
Physical demand now accounts for 50% of production, up from 10% last year. The surge stems from industrial needs including solar panels, electric vehicles, electronics and defense applications.
"Silver is just starting the move, and we are going to see multiples of the current price," von Greyerz said. He added that attempts by bullion banks to sell paper silver are failing quickly.
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Why It Matters: Long-Term Price Projections
Von Greyerz projects silver will eventually reach more than $600 an ounce, with gold surpassing $10,000.
"This is not a normal market because it's now turned into a physical market," he said. "Will it correct? Of course, silver always corrects."
The gold-silver ratio has fallen from above 100 to roughly 50. Von Greyerz expects it to drop to around 15, citing overwhelming demand against limited supply.
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