Silver Price Forecast: XAG/USD hits record high after Trump tariff threat fuels risk-off mood
- Silver jumps to a new record high as geopolitical and trade tensions drive safe-haven demand.
- Trump’s tariff threat on Europe rattles markets and weighs on risk assets.
- Bulls target further upside as momentum stays positive despite stretched conditions.
Silver (XAG/USD) extends its historic rally on Monday, surging to a fresh all-time high near $94.15, as robust safe-haven flows drive demand for precious metals amid escalating trade and geopolitical tensions. At the time of writing, XAG/USD is holding firm around $93.90, up about 32% so far this month.
Investor sentiment has been rattled after US President Donald Trump threatened new tariffs on several European nations in an effort to acquire Greenland. In a post on Truth Social, Trump said tariffs would start at 10% from February 1 and rise to 25% in June unless and until “a deal is reached for the complete and total purchase of Greenland.”
The announcement has injected a fresh layer of uncertainty into global markets, prompting a risk-averse environment that is weighing on global equities and the US Dollar (USD).
Beyond the geopolitical risks, Silver is also benefiting from its dual role as both an investment asset and an industrial metal, with physical demand continuing to exceed available supply.
Meanwhile, a Gold-Silver ratio near 50 highlights Silver’s sharp relative outperformance against Gold, signaling a shift in investor preference toward the higher-beta precious metal.
Technically, XAG/USD stays in a strong uptrend, backed by rising moving averages and consistent dip-buying. On the 4-hour chart, XAG/USD is pressing against the upper Bollinger Band, showing strong bullish momentum, though it also warns that the market is stretched and could pause or pull back slightly before the next leg higher.
On the downside, the middle Bollinger Band near $91.36 acts as immediate support. A sustained break below this area could expose the lower Bollinger Band around $87.66 as the next support zone. On the upside, a continuation of the broader uptrend keeps the psychological $100 level in focus.
Momentum remains positive, with the 4-hour Relative Strength Index (RSI) rising toward 63 after bouncing from the 50 level, supporting the case for further gains despite the risk of short-term consolidation.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Author
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
