Silver extends surge as tariff concerns create market tightness

Silver reached a new 14-year peak, boosted by bets it will be hit by US tariffs while also benefiting from sustained demand for gold — the more expensive precious metal.

Spot silver rose as much as 1.6% in Asian trading, following last week’s 4% increase that pushed it to the highest since 2011. The implied cost of borrowing the precious metal for one month spiked to above 6%, compared with its typical rate of nearly zero, indicating heightened market tightness.

Meanwhile, the spread between London spot and September futures contracts in New York remains unusually wide, similar to the start of the year when worries about tariffs triggered a surge of gold and silver shipments from London to the US, driving prices higher.

“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, an analyst from Phillip Nova Pte. 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.

The metal is up 35% this year, surpassing gold’s 28% gain. It has a dual character as a haven asset, as well as an industrial material used in solar panels. The market is headed for a fifth year in deficit, according to industry group the Silver Institute.

Meanwhile, gold erased some gains in early Asian hours to trade near $3 360 an ounce, following a 0.6% increase last week. It’s been supported this year by haven buying due to increased geopolitical conflicts and trade tensions, along with central-bank buying.

“Gold has already seen a tremendous upswing, and it’s currently expensive,” meaning many investors will be more inclined toward buying silver, Sachdeva said.

Spot gold was steady at $3 359.65 an ounce at 12:52 p.m. in Singapore. The Bloomberg Dollar Spot Index was up 0.1%. Silver was 1.5% higher to $38.9712 an ounce. Platinum and palladium gained.

© 2025 Bloomberg

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.