Silver and Copper Take the Gold: The New Metal Trade

Heading into 2026, silver and copper not gold are where the real action is. Both institutional and retail traders are piling into these metals, betting on fresh record highs as supply squeezes collide with powerful macro trends.

Silver has nearly doubled this year, and most of that move came in just the last couple of months. A historic supply crunch in London, driven by surging demand from India and silver-backed ETFs, sparked the rally. While some of that pressure has eased as more metal is shipped into London vaults, tightness has simply shifted elsewhere: Chinese silver inventories are now at decade lows.

The price move hasn't been a gentle grind higher it's been a spike. Since gold hit a record on October 20 and then mostly stalled, silver has jumped more than 11% to fresh highs, with copper up nearly 9% over the same stretch. Gold may still be the "store of value," but silver is the momentum trade.

A New Wave of ETF and Retail Momentum

Investor behavior has amplified silver's momentum. The iShares Silver Trust (SLV), the largest silver ETF, saw its implied volatility spike to levels last seen during the 2021 meme-stock frenzy. Nearly $620 million entered the fund last week (12/05 had a big outflow) exceeding flows into the top gold ETF marking a decisive vote of confidence from investors who have long been underweight precious metals.

Source: etf.com

Derivatives activity is echoing that enthusiasm. Options on Comex silver futures are seeing heavy demand, especially on the upside, as traders hedge against big moves or speculate on blow-off rallies. Micro futures a small-sized contract popular with retail traders are trading at some of the highest five-day average volumes seen outside the peak in mid-October.

Source: tradingeconomics

Copper: The AI & Electrification Play

Copper's story is less about financial speculation and more about structural demand colliding with policy and supply. It's the workhorse metal behind electrification: power grids, EVs, renewables, and now AI data centers all rely heavily on copper.

That backdrop helped push copper to an all-time high above $11,600 per ton on the London Metal Exchange. At-the-money volatility on March Comex copper futures also jumped, and open interest has clustered in call options above current prices signaling traders are leaning bullish.

US policy has added rocket fuel to an already tight market. When President Trump announced plans in February to impose tariffs on copper to boost domestic supply, New York futures spiked above London prices. That opened up a massive arbitrage trade. Big trading houses like Mercuria, Trafigura, and Glencore rushed to ship metal into the US to capture the price gap.

Even after commodity-grade copper was temporarily spared from tariffs in late July, the story didn't end. The administration has since pledged to revisit duties on primary copper next year, and traders are once again racing to bring metal into the US.

The result: global balances have tightened as copper is pulled into American warehouses and held there. With US prices trading well above global benchmarks, the incentive is to keep metal in the US rather than ship it back out. At the same time, disruptions at major mines and ongoing investment in AI infrastructure and clean energy keep the demand outlook structurally bullish.

Source: LME

What Retail Investors Should Watch

For retail traders and long-term investors, the key takeaways are:

Silver is now the high-beta precious metal trade, powered by ETF inflows, supply squeezes, and speculative options positioning but volatility cuts both ways. Sharp rallies can reverse just as quickly.

Copper represents a deeper macro theme: AI, electrification, and geopolitics. Tariffs, trade flows, and mine disruptions are tightening an already constrained market.

Gold hasn't "broken," but it has been outpaced. It's acting more like a slow, defensive asset while silver and copper are behaving like high-octane plays on the next phase of the cycle.

Heading into 2026, metals are not merely a commodity hedge; they're a macro battleground where financial flows and physical fundamentals collide.

ETFs to track: iShares Silver Trust(SLV), SPDR Gold Shares (GLD), United States Copper Index Fund (CPER).