Silver price surges to 14-year high amid mounting trade tensions

[Redator]

Silver price rose 1.6% to $38.96 per ounce on Monday, its strongest level since September 2011, as investors flocked to safe-haven assets amid escalating US trade tensions.

The spike followed President Donald Trump’s announcement of 30% tariffs on most imports from the European Union and Mexico, boosting demand for non-rate-sensitive commodities. Mexico is also the largest producer of silver and a key supplier to the American market.

Analysts say the rally is driven by speculative flows, with silver moving above key technical resistance levels as traders bet on further gains. ANZ noted that breaching the $35–$37 range could propel silver prices toward $40 per ounce.

Market outlook

Participants are also eyeing US consumer price index and producer price index readings due later this week for signals on Federal Reserve policy, given silver’s tendency to benefit in a lower-rate environment.

In addition, Indian investors, traditionally heavy buyers of gold, have increasingly turned to silver this year as its returns outpaced those of gold.

The rise in appetite for the metal has left the physical market under strain in London, where most silver is held by exchange-traded funds — meaning it isn’t available to lend or buy. Since February, the volume of silver-backed ETFs has expanded by some 2,570 tons, according data compiled by Bloomberg.

Silver’s outperformance of gold means that the ratio between the two has dropped in recent months, though silver still remains relatively cheap historically. It currently takes about 86 ounces of silver to buy 1 ounce of gold, compared with a 10-year average of 80.

“Silver demand is currently benefiting from the threat of trade wars and bullion being way out of reach for many,” Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd, told Bloomberg.

“Gold has already seen a tremendous upswing, and it’s currently expensive,” leaving investors more inclined to consider a cheaper alternative, she added.

Silver ETF inflows at record pace

Silver has emerged as one of the most attractive investment assets of 2025, with funds flowing into exchange-traded products (ETP) backed by the metal already surpassing all of last year, says the Silver Institute.

During the first half of 2025, silver-backed ETPs saw net inflows totalling 95 million oz., taking the total global holdings to 1.13 billion oz. — only 7% below the peak level of 1.21 billion oz. in February 2021, according data compiled by the Institute.

The total value of ETP holdings hit a series of all-time highs in June, exceeding $40 billion for the first time. Nearly half of the year’s gains were recorded in that month alone. By month-end, the metal’s price had gone up by a quarter for the year.

The Silver Institute notes that June 2025 was the most significant monthly increase since the Reddit-driven silver squeeze in early 2021, when prices leaped to nearly $30 an ounce.

(With files from Reuters and Bloomberg)