US Tariff Fears Drive Silver to 14-Year High Amid Market Squeeze
Silver prices surged to their highest level since 2011 as growing concerns over possible US tariffs sent investors rushing into the metal, further tightening an already strained market.
In early Asian trade, spot silver climbed 1.6%, building on last week’s strong 4% gain. The metal’s borrowing costs – typically negligible – shot above 6% for one-month loans, pointing to extreme scarcity.
Analysts say the rally is being fuelled by mounting speculation that silver, while currently exempt from trade duties, could soon be swept up in broader protectionist moves.
“Silver demand is currently benefiting from the threat of trade wars and bullion being way out of reach for many” potential buyers, said Priyanka Sachdeva, analyst at Phillip Nova Pte Ltd. While under current terms the metal is excluded from President Donald Trump’s levies, “physical and industrial players in the US want to secure the supplies before potential tariffs” are announced, she added.
Traders are also eyeing the unusually large gap between London spot and New York futures – a signal reminiscent of early-year jitters when fears of tariffs sparked heavy flows of silver and gold across the Atlantic.
The numbers tell a powerful story. Silver is up an impressive 35% in 2025, outpacing gold’s 28% rise. Its appeal lies in its versatility – part safe haven, part industrial workhorse. With its key role in solar panels and electronics, demand has remained strong. Supply? Not so much. The Silver Institute expects the market to remain in deficit for a fifth straight year.
Gold, on the other hand, has taken a breather. After a 0.6% gain last week, it slipped slightly in early Asian trading to hover near US$3,360 an ounce.
“Gold has already seen a tremendous upswing, and it’s currently expensive,” said Sachdeva. That price pressure is pushing more investors toward silver, she noted.
At 12:52pm in Singapore, spot gold was steady at US$3,359.65 an ounce, while silver jumped 1.5% to US$38.9712. Other precious metals, including platinum and palladium, also posted gains. The Bloomberg Dollar Spot Index nudged up 0.1%.
With the global trade environment growing more tense and silver’s role in industry gaining prominence, this rally could have legs. And if US tariffs on silver do materialise, don’t be surprised if the squeeze gets even tighter.
