Since the beginning of this year, the increase in silver prices has consistently outpaced that of gold, gradually establishing silver as a favored “hedge asset” among investors. Market data indicates that silver prices are expected to rise for the tenth consecutive month, which would set a new record for the longest monthly winning streak in its history. As of Thursday’s press time, Silver/USD (XAGUSD.FX) was hovering around $89 per ounce, with a cumulative increase of approximately 4.3% this month.
Recently, heightened global trade tensions and geopolitical risks have significantly increased market demand for hedge assets. Rania Gule, Senior Market Analyst at XS.com, pointed out that silver stands out due to its “dual attributes.” She explained that silver is not only an investment product but also has a wide range of industrial uses, which has made it more frequently regarded as a preferred hedging tool compared to gold recently. Gule further analyzed that while trade frictions might boost silver prices in the short term due to safe-haven capital inflows, they could also trigger mid-term concerns about the outlook for global industrial activity, leading to price fluctuations characterized by “a shift from aggressive buying to orderly profit-taking.”
Bas Kooijman, CEO of DHF Capital, holds a similar view. He believes that the temporary tariff measures implemented by the United States and potential tax rate increases have rekindled market concerns about an escalation in trade confrontations, prompting capital to flow into safe-haven assets. At the same time, the ongoing tensions in Eastern Europe and uncertainties surrounding nuclear negotiations in the Middle East have further enhanced the appeal of precious metals. Silver often benefits significantly during periods of increased global uncertainty.
From a fundamental perspective, the silver market is expected to experience a sustained supply deficit. According to forecasts by the Silver Institute and Metals Focus, the global silver market will face a shortfall of 67 million ounces in 2026, marking the sixth consecutive year of supply deficit. Gule emphasized that the magnitude of this deficit is “by no means insignificant,” providing solid medium-term bottom-line support for silver prices. The silver market is “transitioning from a news-driven market to a fundamentally driven market.”
Looking ahead, the macro-monetary environment is expected to become more favorable for silver. Currently, the market generally anticipates that the Federal Reserve will keep interest rates unchanged in March and has priced in approximately 60 basis points of rate cuts for the year. Lower interest rates would reduce the opportunity cost of holding non-yielding assets like silver.
In summary, Gule stated that silver “has not lost its luster, it is merely recalibrating.” The current volatility is a natural reaction under the influence of major political events. Unless there is a fundamental shift in monetary policy or a sudden collapse in global industrial demand, this does not negate the overall upward trend for silver.
