Silver rally in December prompts ominous warning from Elon Musk — Why Tesla CEO thinks it's ‘not good’

Silver has been seeing an unprecedented rally over the past few days, touching record highs and giving better returns than most assets including gold and key stocks. The surprise silver rally has now triggered a warning from tech billionaire Elon Musk.

“This is not good. Silver is needed in many industrial processes,” Musk posted on X on 27 December as silver hit a peak of $79 for an ounce on Friday.

Elon Musk's comment on the silver rally has also sparked tension in the trading community.

“I tried to warn you all . You know it’s bad when Elon musk is worried about silver price soaring into oblivion,” one person said.

“I tried to warn you all . You know it’s bad when Elon musk is worried about silver price soaring into oblivion,” another added.

What is silver used for?

Silver is essential in a lot of industries, with several of them seeing unprecedented demand in the past few months.

These include electrification, solar power panels, electric vehicles and data centres among others. This rising demand is now eating into silver inventories.

The usage of silver in electric vehicles may be especially concerning for Musk, who is the CEO of EV maker Tesla.

Silver now better than Nvidia

Apart from its usage in several key industries, silver also acts as a store of wealth. The silver rally in December has now turned investors' attention to the precious metal, with more people coming forward to buy it.

As of today, silver has become a more valuable asset than Nvidia, the AI chipmaker that has caused ripples around the world after becoming the most valuable company in the world.

But silver has topped Nvidia's record, with its value increasing to $4.65 trillion after the white metal scaled yet another peak on Monday.

In comparison, Nvidia ended at a market cap of $4.63 trillion.

Silver rate today

Continuing its rally for the fifth straight session, silver rate today touched a new peak of $84 per ounce in the spot market.

Just 20 minutes before the futures opened, silver rate today surged to a record high of $83.75 per ounce, up by over 6% from the previous close.

However, the precious metal pulled back as investors booked profits and easing geopolitical tensions cooled safe-haven demand.

Spot silver lost 1.3% to $78.12 per ounce, after hitting the all-time high earlier in the session.

Silver has gained 181% year-to-date, outshining gold.