Silver prices posted a fresh all-time high on Monday, surging more than 12% to around $115 per ounce.

Markets remain focused on heightened geopolitical uncertainty, following US President Donald Trump’s threat to impose 100% tariffs on Canada should it finalize a trade agreement with China. Renewed attention to Arctic security issues and Greenland has also added to investor caution. At the same time, attention is turning to the upcoming policy meeting of the US Federal Reserve, amid preparations by Trump to appoint a new Fed chair.

Silver rose 12.48% to trade at $115.08 per ounce by 12:16 a.m. US Eastern Time, while gold gained 2.22% to $5,093.35 per ounce. Platinum climbed 2.96% to $2,852.83, and palladium jumped 6.07% to $2,138.23 at the same time.

Silver (XAG/USD) extended its strong upward momentum at the start of the week, trading near $109.50 at the time of writing on Monday, up 6.90% on the day. Earlier in the session, silver touched a new record high at $110.90, supported by a macroeconomic environment characterized by elevated uncertainty, which continues to boost demand for safe-haven assets.

US concerns push investors toward precious metals

Risk aversion remains driven by growing concerns surrounding the United States, including repeated trade threats from the US administration, rising risks of budget approval disruptions, and questions over the independence of the Federal Reserve. These factors have revived fears of deterioration in both the economic and institutional frameworks, prompting investors to turn to precious metals as a hedge against economic and financial instability.

Persistent pressure on the US dollar is another key factor supporting silver prices. The dollar remains weighed down by expectations of interest rate cuts and political uncertainty in Washington, making dollar-denominated metals more attractive to non-US buyers and mechanically boosting demand.

Strong industrial fundamentals underpin the rally

Beyond its role as a safe haven, silver is also benefiting from robust industrial demand. Demand linked to the energy transition—particularly from solar power, electrification, and power grid infrastructure—continues to tighten effective supply, at a time when mine output growth remains constrained.

US monetary policy expectations also remain central. Markets believe the Federal Reserve is likely to maintain a cautious stance in the near term, while keeping the door open to monetary easing later in the year should economic slowing accelerate. This environment of lower real yields continues to support non-yielding assets such as silver.

Overall, despite silver’s sharp rise since the start of the year, the current macro backdrop—marked by political uncertainty, trade tensions, and a weaker US dollar—continues to support the case for sustained demand for silver, both as a safe-haven asset and as a strategic metal in the global economy.

Why do people invest in silver?

Silver is one of the most widely traded precious metals and has historically been used as a store of value and a medium of exchange. While it is less prominent than gold, investors turn to silver to diversify portfolios, for its intrinsic value, or as a hedge during periods of high inflation. Investment exposure to silver can be gained through physical holdings such as coins and bars, or via financial instruments such as exchange-traded funds (ETFs) that track its global price.

What factors influence silver prices?

Silver prices are driven by a broad range of factors. Geopolitical tensions or fears of a deep economic recession can push prices higher due to its safe-haven status, albeit to a lesser extent than gold. As a non-yielding asset, silver tends to benefit from lower interest rates.

Price movements are also influenced by the US dollar, since silver is priced in dollars (XAG/USD). A stronger dollar typically caps silver’s upside, while a weaker dollar supports price gains. Other factors include investment demand, mining supply—silver is more abundant than gold—and recycling rates.

How does silver interact with gold prices?

Silver prices tend to track gold, as both share safe-haven characteristics. The gold-to-silver ratio, which reflects how many ounces of silver equal the value of one ounce of gold, is often used to assess their relative valuation. Some investors view a high ratio as signaling undervaluation of silver or overvaluation of gold, while a low ratio may suggest gold is undervalued relative to silver.

How does industrial demand affect silver prices?

Silver is widely used in industry, particularly in sectors such as electronics and solar energy, due to its superior electrical conductivity—outperforming both copper and gold. Rising industrial demand tends to lift prices, while weaker demand can weigh on them. Economic developments in the US, China, and India also influence price dynamics, as major industrial sectors in the US and China rely heavily on silver, while consumer demand in India, especially for jewelry, plays a key role in shaping price levels.

Monday’s rally in silver was especially sharp, with prices having more than tripled since mid-2025, driven by a combination of investment inflows and tight physical supply. Unlike gold, around 60% of silver demand comes from industrial uses—a share that is rising rapidly.

AI data centers require large quantities of silver used in high-performance electronics, while global solar installations continue to expand, with installed capacity in 2026 expected to consume more than 120 million ounces. Electric vehicles are adding further pressure, alongside grid upgrades and energy storage projects that continue to absorb supply.

On the supply side, silver mine production has struggled to keep pace. Around 70% of global output is produced as a by-product of other metals, limiting supply responsiveness to higher prices. This imbalance has led to a notable drawdown in inventories at major vaults, reinforcing price momentum and pushing the gold-to-silver ratio toward 46:1.

Gold-to-silver ratio signals a structural shift in precious metals markets

The collapse in the gold-to-silver ratio is one of the clearest signs that the current cycle differs from previous rallies. Less than a year ago, one ounce of gold was worth more than 120 ounces of silver; today, that ratio has fallen by more than half.

Historically, such rapid compression has only occurred during periods of strong industrial expansion combined with monetary uncertainty. If current trends persist, analysts see a return to 2011 levels near 32:1 as plausible, particularly if supply constraints intensify.

For investors, this divergence highlights differing roles: gold remains the primary hedge against political and geopolitical risk, while silver—despite higher volatility—is increasingly tied to the physical infrastructure of the global energy and technology transition.

Could silver break above $125?

A move above $125 per ounce is increasingly seen as a realistic scenario as what is being described as a “silver squeeze” intensifies in 2026. Silver is currently the best-performing major asset this year, and prices near $110 are increasingly viewed as a base rather than a peak.

Unlike previous rallies driven largely by speculation, the current cycle is underpinned by a genuine supply deficit. The market has recorded supply shortfalls for eight consecutive years, while demand from AI data centers, solar infrastructure, and electrification continues to accelerate.

Supply constraints have been exacerbated by new Chinese export licensing rules introduced on January 1, sharply restricting global silver flows. This has created liquidity traps for industrial buyers, forcing manufacturers to pay elevated premiums to secure metal. At the same time, mine output remains constrained due to silver’s by-product nature, limiting the industry’s ability to respond quickly even at higher prices.

Valuation dynamics also point to further upside. During precious metals bull markets, the gold-to-silver ratio historically declines. With gold trading near $5,000 per ounce, a return to a 40:1 ratio would mathematically imply silver prices around $125. Should industrial pressure intensify and investment inflows persist, analysts increasingly view a $125–$150 range as a realistic outcome for 2026, rather than an extreme scenario.

US stock indices rose during Monday’s trading, as investors closely monitored upcoming corporate earnings releases alongside anticipation of the Federal Reserve’s policy decision.

Several major companies are set to report earnings this week, most notably Apple, Meta, and Microsoft, along with other large technology firms.

Investors are also awaiting the Federal Reserve’s policy meeting, which begins on Tuesday and concludes on Wednesday, followed by the interest rate decision.

In trading, the Dow Jones Industrial Average rose by 0.6%, or about 280 points, to 49,375 points by 18:20 GMT. The broader S&P 500 gained 0.6%, or roughly 42 points, to 6,957 points, while the Nasdaq Composite advanced 0.6%, or about 152 points, to 23,653 points.

Palladium prices rose during Monday’s trading, extending strong gains amid expectations of stronger demand, alongside a weaker US dollar against most major currencies, which eased pressure on commodities and metals.

With demand for platinum group metals (PGMs) remaining robust, the global research team at Bank of America Securities raised its 2026 price forecasts for platinum to $2,450 per ounce, up from a previous estimate of $1,825, and lifted its palladium forecast to $1,725 per ounce from $1,525.

Key takeaways from the bank’s weekly Global Metals Markets report dated January 9 showed that disruptions to PGM flows stemming from trade disputes continue to keep markets tight, particularly the platinum market. The report also noted that Chinese platinum imports are providing additional price support.

While a supply response is expected, the bank said it is likely to be gradual, citing “production discipline and inflexible mine supply.”

These forecasts come as platinum and palladium prices continue to climb this year, with spot prices reaching $2,446 per ounce for platinum and $1,826 per ounce for palladium.

As a result, both metals have exceeded the bank’s previous projections, prompting an upward revision to its price outlook.

In comments to Mining Weekly, the bank said: “We continue to expect platinum to outperform palladium, supported by persistent market deficits.”

The bank added that US tariffs have had a visible impact on several metals markets, while the risk of further tariffs continues to loom over PGMs.

This has been one of the factors behind rising inventories at the Chicago Mercantile Exchange, alongside a surge in exchange-for-physical (EFP) transactions.

Palladium EFP activity has been particularly strong, driven largely by growing concerns over the potential imposition of US tariffs on Russian palladium, amid ongoing anti-dumping and countervailing duty investigations.

In this context, the bank noted that the US Department of Commerce has estimated the dumping margin for unworked Russian palladium at around 828%.

The bank added that any tariffs imposed on undeclared Russian volumes could push domestic prices higher, given Russia’s status as a key global supplier of palladium.

Chinese import demand adds price support

Outside the United States, China has provided further support to prices. Early in 2025, a sharp recovery in jewellery sector activity attracted additional ounces into the Chinese market. With gold prices at record highs, this development is particularly significant, as substituting just 1% of gold jewellery demand could increase the platinum deficit by around one million ounces, equivalent to nearly 10% of total supply.

In the second half of 2025, the launch of physically backed platinum and palladium futures contracts on the Guangzhou Futures Exchange (GFEX) provided further price support.

These contracts represent China’s first local hedging instruments for PGMs denominated in renminbi, and they allow for physical delivery of both bars and sponge metal. The bank said that access to physical liquidity was a key driver behind the price rally seen in December.

China’s palladium imports have also quadrupled since September compared with a year earlier, a move the bank described as difficult to explain on a purely fundamental basis given the gradual phase-out of internal combustion engines. It suggested that the increase is largely linked to the launch of palladium futures contracts on the Guangzhou exchange.

Gradual supply response expected

With PGM prices currently trading above marginal production costs and incentive prices for investment, the prospect of a supply response has come into focus.

The bank said: “We expect any response to be measured. Producer margins — particularly in South Africa and North America — have been under sustained pressure over the past two years, which may lead companies to be cautious when expanding output.”

As for new supply, any increases are likely to materialise only gradually, given the long lead times required to move from development to stable production levels.

Many ongoing projects represent incremental expansions or phased output increases, rather than sources of rapid, large-scale supply growth.

On the supply side, production issues in South Africa tightened the platinum market during 2025. Mine output in the country fell by around 5% year-on-year between January and October 2025, mainly due to operational challenges such as flooding and plant maintenance in the first quarter. The bank expects a modest recovery in South African platinum production this year, but not enough to eliminate the market deficit.

In Russia, the world’s largest palladium supplier, output also faced challenges as Norilsk Nickel transitioned to new mining equipment and processed changes in ore composition. As a result, the company’s platinum production fell 7% and palladium output declined 6% year-on-year in the first nine months of 2025. As these temporary disruptions fade, Russian PGM production is expected to recover this year, potentially moderating the pace of palladium price gains.

While higher prices could incentivise additional supply, the bank believes any increases are more likely to come from life-of-mine extensions and project restarts, rather than rapid capacity expansions.

In practice, most new supply requires several years to move from construction to full production, and many projects currently under development are incremental or phased expansions rather than immediate sources of significant new volumes.

The bank noted that two major new projects approaching production — Ivanhoe Mines’ Platreef project and Wesizwe’s Bakubung project in South Africa — are expected to add a combined 150,000 ounces of platinum and 100,000 ounces of palladium during the current year.

Other expansion projects remain longer term and are contingent on final investment decisions. Among them is Valterra Platinum’s Sandsloot underground project at the Mogalakwena mine, which is not expected to reach an investment decision before 2027, with underground ore extraction potentially starting after 2030.

Meanwhile, the US dollar index fell 0.7% by 16:08 GMT to 96.8 points, after recording a high of 97.3 and a low of 96.8.

In trading, March palladium futures jumped 6.1% by 16:08 GMT to $2,151.5 per ounce.

Bitcoin hovered near a one-month low on Monday, extending the sharp losses recorded last week, as investors remained cautious ahead of the Federal Reserve’s monetary policy meeting and following a broad wave of liquidations across leveraged cryptocurrency markets.

The world’s largest cryptocurrency was trading down 0.2% at $80,185.6 as of 03:05 a.m. US Eastern Time (08:05 GMT).

Bitcoin fell more than 6% last week amid a broader risk-off move across global financial markets, driven by rising uncertainty over global monetary policy, sharp volatility in foreign exchange markets, and fluctuations in US Treasury yields.

Liquidations and Fed caution weigh on crypto markets

The selloff intensified last week due to forced liquidations in derivatives markets, as highly leveraged positions were unwound at a rapid pace.

According to market data, leveraged cryptocurrency positions worth more than $1 billion were liquidated during the recent turbulence, with long Bitcoin bets accounting for the largest share of losses. Such liquidations typically amplify price declines, as positions are automatically closed, adding further downward momentum.

Bitcoin had rallied strongly earlier this year, supported by expectations of US monetary easing and continued inflows into spot exchange-traded products. However, sentiment turned more cautious as investors reassessed the outlook for interest rates and reduced exposure to high-risk assets, amid sharp moves in currency and bond markets.

Market focus has now shifted squarely to the Federal Reserve’s two-day policy meeting, which concludes on Wednesday. The Fed is widely expected to keep interest rates unchanged, but traders will closely monitor comments from Chair Jerome Powell for signals on the timing and scale of any potential rate cuts later this year.

Investors are also watching for guidance on liquidity conditions and the Federal Reserve’s balance sheet, both of which are viewed as key drivers of cryptocurrency market performance.

Adding to uncertainty, traders are awaiting an anticipated announcement by US President Donald Trump regarding his nominee for the next Federal Reserve chair. The appointment is seen as potentially influential for future monetary policy direction, particularly if the new leadership is perceived as more dovish or more aligned with the administration’s economic priorities.

Cryptocurrency prices today: altcoins extend losses

Most major altcoins also declined on Monday, extending losses amid persistent market caution.

Ethereum, the world’s second-largest cryptocurrency, fell 1.5% to $2,897.92.

XRP slipped 0.8% to $1.88.