Silver prices surged to unprecedented levels on Friday, reaching a historic peak driven by robust demand in global markets. The spot price of silver briefly touched $100 per ounce, marking a significant milestone for the precious metal.
The rally in silver prices is attributed to several factors, primarily the increasing investor appetite for safe-haven assets amidst persistent geopolitical instability. Concerns surrounding potential economic downturns and anxieties regarding international trade relations are fueling the demand for silver as a store of value.
Since January 2024, coinciding with the return of Donald Trump to the US presidency for a second term, silver prices have witnessed a remarkable increase, exceeding 200%. This surge reflects growing apprehension among investors regarding potential shifts in US trade policy and their broader impact on the global economy.
Adding to the upward pressure on prices are ongoing challenges in expanding silver processing capacity. Coupled with persistent supply shortages, these constraints further exacerbate the imbalance between supply and demand, driving prices higher.
Investor sentiment remains cautious, particularly in light of renewed threats from the US President to impose tariffs on European nations. These potential trade barriers contribute to the overall climate of uncertainty, further bolstering the appeal of silver as a hedge against risk.
The US President has threatened to impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, Britain, the Netherlands, and Finland, starting in February. He indicated that the tariff rate would increase to 25% in June, remaining in effect until an agreement is reached allowing the United States to purchase Greenland.
Experts suggest that the current trend indicates a potential for continued price volatility in the silver market. Investors are advised to closely monitor geopolitical developments and trade policy announcements, as these factors are likely to exert a significant influence on future price movements.
