Silver breaks through $90, setting a new record high, with currency anxieties and geopolitical factors fueling the rally.
2026-01-14 15:27:14
On Wednesday (January 14), spot silver fluctuated upwards during the European session, rising by about 4% on the day and currently trading around $90.50. It had previously touched a record high of $91.54 per ounce. This rise reflects the continuation of the strong rebound that began in 2025, rather than a short-term reaction to a single data release.
Silver prices broke through the $90 per ounce mark, setting an unprecedented milestone for the metal. Weaker-than-expected US inflation data for December, although economists pointed out that the data was temporarily suppressed by distortions related to the prolonged government shutdown, boosted market confidence that monetary policy conditions may eventually ease further, thus supporting non-interest-bearing assets such as precious metals, including silver.
The market currently expects the Federal Reserve to pause rate cuts in the coming months, but swap pricing still indicates at least two more rate cuts before the end of the year. This outlook strengthens demand for silver through the direct transmission channel, as expectations of lower real interest rates tend to increase the relative attractiveness of the metal.
Meanwhile, a new wave of political attacks against Federal Reserve Chairman Jerome Powell has reignited concerns about the Fed's independence. Despite public defense of Powell by central bank governors worldwide and Wall Street executives, this event has increased market sensitivity to institutional risks. This relationship is largely correlated rather than mechanical; investor confidence reacts to perceptions of governance stability rather than to immediate changes in policy setting.
The tense geopolitical environment has amplified demand for safe-haven assets. Developments such as the US arrest of the Venezuelan leader, renewed rhetoric regarding Greenland, and escalating unrest in Iran have exacerbated perceptions of global instability. While these events have not directly disrupted precious metal supply, they have increased risk aversion—a sentiment historically correlated with increased capital inflows into gold and silver.
Citigroup has raised its target price for silver to $100 per ounce, highlighting that high market expectations and uncertainty will continue to support prices.
Silver has outperformed gold. Driven by factors such as the short squeeze in October, continued tight physical supply in the London market, and a surge in speculative positions, the metal is expected to rise by approximately 150% by 2025.
Analysts also point out that a broader rotation is emerging in the commodities sector as investors seek to diversify their investments away from traditional financial assets. According to Hao Hong of Lotus Asset Management, this rally still has room to continue, with prices potentially reaching $150 per ounce by the end of 2026. This forecast reflects momentum and positioning dynamics, rather than a definitive price movement.
Uncertainty surrounding U.S. trading policy adds another layer of complexity. Traders are closely watching the outcome of a Section 232 investigation that could impose import tariffs on silver. Concerns about such measures have altered physical flows, with reports of large amounts of silver remaining in the U.S. instead of circulating globally, leading to supply shortages in other regions and further amplifying price movements. This connection is indirect, as policy uncertainty affects backpack behavior, which in turn affects market equilibrium.
The latest surge highlights the scale of investment funds in the precious metals sector. Trading volumes on Comex and the Shanghai Futures Exchange have remained high since late December, indicating continued active participation from speculative funds and institutional investors. The US dollar index remained stable, fluctuating around 99.10 during Wednesday's European session, ruling out currency volatility as a primary driver of the rally.
Strategists warn that while demand for precious metals as a hedge against inflation and financial instability may persist, gains in 2026 may not match the astonishing pace of last year.
Some analysts predict that gold will outperform silver in the long run due to its deeper liquidity and stronger correlation with geopolitical risks. Even so, silver's break above the $90 mark further solidifies its position as a highly correlated indicator of macroeconomic uncertainty, making it highly sensitive to changes in monetary policy expectations, policy credibility, and global risk sentiment.
(Spot silver daily chart, source: EasyForex)
At 15:25 Beijing time, spot silver is currently trading at $90.50 per ounce.
A New Milestone for Silver
Silver prices broke through the $90 per ounce mark, setting an unprecedented milestone for the metal. Weaker-than-expected US inflation data for December, although economists pointed out that the data was temporarily suppressed by distortions related to the prolonged government shutdown, boosted market confidence that monetary policy conditions may eventually ease further, thus supporting non-interest-bearing assets such as precious metals, including silver.
The market currently expects the Federal Reserve to pause rate cuts in the coming months, but swap pricing still indicates at least two more rate cuts before the end of the year. This outlook strengthens demand for silver through the direct transmission channel, as expectations of lower real interest rates tend to increase the relative attractiveness of the metal.
Meanwhile, a new wave of political attacks against Federal Reserve Chairman Jerome Powell has reignited concerns about the Fed's independence. Despite public defense of Powell by central bank governors worldwide and Wall Street executives, this event has increased market sensitivity to institutional risks. This relationship is largely correlated rather than mechanical; investor confidence reacts to perceptions of governance stability rather than to immediate changes in policy setting.
Geopolitical tensions and risk aversion
The tense geopolitical environment has amplified demand for safe-haven assets. Developments such as the US arrest of the Venezuelan leader, renewed rhetoric regarding Greenland, and escalating unrest in Iran have exacerbated perceptions of global instability. While these events have not directly disrupted precious metal supply, they have increased risk aversion—a sentiment historically correlated with increased capital inflows into gold and silver.
Citigroup has raised its target price for silver to $100 per ounce, highlighting that high market expectations and uncertainty will continue to support prices.
Silver has outperformed gold. Driven by factors such as the short squeeze in October, continued tight physical supply in the London market, and a surge in speculative positions, the metal is expected to rise by approximately 150% by 2025.
Analysts also point out that a broader rotation is emerging in the commodities sector as investors seek to diversify their investments away from traditional financial assets. According to Hao Hong of Lotus Asset Management, this rally still has room to continue, with prices potentially reaching $150 per ounce by the end of 2026. This forecast reflects momentum and positioning dynamics, rather than a definitive price movement.
Supply constraints and trading policy risks
Uncertainty surrounding U.S. trading policy adds another layer of complexity. Traders are closely watching the outcome of a Section 232 investigation that could impose import tariffs on silver. Concerns about such measures have altered physical flows, with reports of large amounts of silver remaining in the U.S. instead of circulating globally, leading to supply shortages in other regions and further amplifying price movements. This connection is indirect, as policy uncertainty affects backpack behavior, which in turn affects market equilibrium.
The latest surge highlights the scale of investment funds in the precious metals sector. Trading volumes on Comex and the Shanghai Futures Exchange have remained high since late December, indicating continued active participation from speculative funds and institutional investors. The US dollar index remained stable, fluctuating around 99.10 during Wednesday's European session, ruling out currency volatility as a primary driver of the rally.
Strategists warn that while demand for precious metals as a hedge against inflation and financial instability may persist, gains in 2026 may not match the astonishing pace of last year.
Some analysts predict that gold will outperform silver in the long run due to its deeper liquidity and stronger correlation with geopolitical risks. Even so, silver's break above the $90 mark further solidifies its position as a highly correlated indicator of macroeconomic uncertainty, making it highly sensitive to changes in monetary policy expectations, policy credibility, and global risk sentiment.
(Spot silver daily chart, source: EasyForex)
At 15:25 Beijing time, spot silver is currently trading at $90.50 per ounce.
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