Silver Hits Record High of $84.60 as Geopolitical and Monetary Tensions Rise

Silver prices hit an all-time high of $84.60 per ounce on Monday, January 12, 2026. The surge was driven by a combination of weak U.S. dollar sentiment and growing geopolitical tensions. Spot prices climbed to $83.96 earlier in the day before stabilizing around $84.88.

The U.S. dollar slid as President Donald Trump's administration threatened a criminal investigation into Federal Reserve Chair Jerome Powell over alleged cost overruns at the Fed's headquarters. The move raised concerns about central bank independence and triggered a safe-haven shift toward precious metals.

Industrial demand for silver remains robust, with rising consumption in solar power, electric vehicles, and data centers contributing to persistent supply deficits. Analysts note that silver's dual role as both an industrial and monetary asset makes it especially sensitive to macroeconomic shifts.

Why Did This Happen?

The Federal Reserve's potential loss of independence has introduced a new layer of uncertainty into financial markets. Powell stated the Justice Department issued subpoenas to the Fed, a move seen as an effort to pressure the central bank to lower interest rates. This raised fears about the Fed's ability to operate independently, which has historically been a cornerstone of U.S. monetary policy according to market analysis.

Gold also surged to new highs, with prices exceeding $4,600 an ounce, but silver outperformed gold due to its industrial applications and speculative appeal. Analysts from Julius Baer and RHB Retail Research said silver's outperformance indicates increased real-economy demand rather than speculative trading.

How Did Markets React?

Silver futures on exchanges like the CME Group's COMEX and the Shanghai Futures Exchange reached record levels. In India, silver futures on the Multi Commodity Exchange (MCX) rose to Rs 2,63,996 per kilogram, with contracts for March, May, and July expiries all reaching lifetime highs.

The rally in silver prices also lifted shares of major producers like Hindustan Zinc, which saw its stock jump over 3% on Monday. Silver ETFs mirrored the performance, with several gaining over 4% as investors sought exposure to the metal's price momentum.

What Are Analysts Watching Next?

Analysts are closely monitoring the potential for further index rebalancing in global commodity indices. The Bloomberg Commodity Index (BCOM) is expected to reduce its allocation to silver and gold after their sharp 2025 gains, which could result in $7 billion of selling pressure across both metals according to expert analysis.

Despite these near-term risks, long-term fundamentals remain strong. Silver's supply deficit has persisted for five consecutive years, driven by industrial demand and limited mine production. Analysts at The Oregon Group suggest that under certain scenarios, silver could trade as high as $150 an ounce in 2026.

Investors are also watching for further developments in U.S. monetary policy and geopolitical tensions. A prolonged period of Fed uncertainty or renewed global conflict could strengthen the case for continued precious metal appreciation.

For now, silver's rally reflects a shift in market dynamics, where traditional safe-haven assets like gold and silver are gaining traction amid a loss of confidence in fiat currencies and central bank credibility.