Silver Surges Past $117 as Geopolitical Tensions and Safe-Haven Demand Drive Record Rally
With silver (XAG) trading above $115 as of Wednesday, representing a 3.1% rise over the previous day, silver prices are continuing their
Quick overview
- Silver prices have surged above $115, marking a 3.1% increase, following an all-time high of $117 per ounce.
- Geopolitical tensions and uncertainty surrounding U.S. trade policies have driven demand for silver as a safe-haven asset.
- The weakening U.S. dollar and expectations of lower interest rates are further supporting silver prices.
- Retail investor enthusiasm for silver has increased, surpassing interest in cryptocurrencies, but caution is advised due to potential volatility.
With silver [[XAG/USD]] trading above $115 as of Wednesday, representing a 3.1% rise over the previous day, silver prices are continuing their remarkable upward trajectory. On Tuesday, the price of the precious metal hit an all-time high of $117 per ounce before volatility caused prices to momentarily fall below $103 in a matter of hours.
Geopolitical Friction Fuels the Rally
The spike in silver prices coincides with increased global tensions and rising demand for safe haven assets, which are mostly caused by the Trump administration’s unclear policies. Investor interest in precious metals has been bolstered by President Donald Trump’s recent pronouncement of a 100% tariff threat against Canada over a possible trade agreement with China, as well as higher duties of 25% on South Korean lumber, medicines, and automobiles.
“Policy uncertainty under Trump has been the dominant driver for precious metals this year,” the Augmont Bullion report, which was released on January 28, states. “A fresh wave of first-time investors, especially across Asia and Europe, is aggressively building personal holdings of gold and silver, adding structural support to prices.”
The “Debasement Trade” and a Weakening Dollar
The US dollar’s decline has contributed to the white metal’s surge, with the Dollar Index falling to its lowest point since February 2022 as a result of Trump’s remarks regarding the worth of the currency. Silver and other commodities denominated in dollars usually gain from a weaker dollar, increasing their appeal to foreign buyers.
The Federal Reserve’s policy meeting at the end of 2025 is the center of market attention. It is generally anticipated that the central bank would keep interest rates at their present levels after three straight drops. In the second half of 2026, traders expect rate cuts, perhaps starting in June. Silver prices are further supported by lower interest rates since they lower the opportunity cost of storing non-yielding precious metals.
Silver may stabilize before perhaps rising beyond $120, according to the Augmont Bullion analysis, with important support levels noted at $103. If this level is broken, there may be a retracement toward $100 and $97.
But not every expert has the same optimistic view. Bloomberg Intelligence Senior Commodity Strategist Mike McGlone warned that silver might be on the verge of a major peak. “I believe that silver will reach a peak this year that will last for many years. “Deficits reverse when price shifts at such high velocity,” McGlone said, pointing to the metal’s astounding 200% annual price spike.
Retail FOMO: Silver Overtakes Crypto
This month, conversations about gold and silver have surpassed those on cryptocurrencies, according to social media data from market intelligence platform Santiment. Retail investors are displaying a high level of FOMO. Citing Tuesday’s tumultuous session as evidence, Santiment analysts cautioned that such retail euphoria frequently portends an impending price top.
“Case in point was today, when silver set records by surging above $117.70 and then falling back down below $102.70 just two hours later after retail hype peaked,” said analysts at Santiment.
Silver’s fundamentals are still supported by industrial demand, which works in tandem with safe-haven flows to keep prices up despite cautions about possible profit-taking. Due to its dual function as an industrial metal and a store of value, silver is unique among precious metals in the face of ongoing political and economic unpredictability on a global scale. However, investors should be wary of increased volatility in the near future.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
- Read our latest reviews on: Avatrade, Exness, HFM and XM
Save