From Gold to Silver: Risk-Off Sentiment Surges — When Will the Silver Rally Peak?

TradingKey - Amid uncertainty surrounding Trump’s proposed tariffs, investors continue to flock to precious metals for safety. As of this report, gold has hit a new record high at $4,075 per ounce, with an intraday peak of $4,085.16. Meanwhile, silver has surged to $51.55 per ounce — its highest level in 14 years.

Rising Safe-Haven Demand

Ongoing geopolitical conflicts and global instability have fueled demand for safe-haven assets throughout the year. Silver has soared over 70% year-to-date, significantly outpacing gold’s 50% gain.

Strong Industrial Demand

Silver’s rally is also driven by robust industrial demand and growing investor appetite for silver ETFs, which provide long-term support for prices.

Unlike gold, silver possesses dual characteristics as both a precious metal and an industrial metal. In recent years, the global green energy transition has boosted silver consumption in high-tech sectors such as solar photovoltaics, electric vehicles, and semiconductors.

Market Fears of Supply-Demand Imbalance

With the U.S. government’s “Section 232” investigation into critical minerals — including silver, platinum, and palladium — nearing completion, market tensions remain elevated. Traders worry that if silver is included in new tariffs or tax measures, it could further disrupt global supply chains.

This concern, combined with a sharp decline in silver inventories on the London market, underscores tightening supply conditions — setting the stage for heightened price volatility.

Vulnerability to Sharp Corrections

Goldman Sachs analysts noted in a recent report that the silver market has relatively low liquidity — only about one-ninth the size of the gold market — which amplifies price swings. They warned that even a brief outflow of capital could trigger a sharper-than-expected pullback, especially if central banks refrain from intervention. Such a move would undermine the tightness in London’s physical market, which has been a key driver of silver’s upward momentum.

As silver climbs to multi-year highs, the question is no longer just about upside potential — but when the turning point may arrive.