Silver Prices Soar to 13-Year High Amid Tariff Fears and Fed Uncertainty

Silver prices surged to a 13-year high of $37.52 per troy ounce, driven by geopolitical tensions and safe-haven demand, despite pressure from a stronger dollar and mixed trading volumes. The rally was fueled by US President Trump's warning of sweeping tariff hikes and uncertainty over the US Federal Reserve's interest rate cuts. Silver miners also rallied, with some junior companies seeing even steeper gains. The Silver Institute has projected a fifth consecutive annual supply deficit, driven by rising industrial demand, particularly from the solar energy sector.

Silver prices surged to a 13-year high of $37.52 per troy ounce on Friday, driven by geopolitical tensions and safe-haven demand, despite pressure from a stronger dollar and mixed trading volumes. The rally was fueled by US President Donald Trump's warning of sweeping tariff hikes and uncertainty over the US Federal Reserve's interest rate cuts. Spot silver (XAG/USD) climbed 1.31% to $37.52, its highest level since 2011, according to FXStreet data [1].

The rally gathered momentum after Trump warned of a proposed 50% tariff on copper, fueling market volatility and reigniting demand for safe-haven assets like silver and gold. The Gold/Silver ratio fell to 88.88 on Friday from 89.76 a day earlier, indicating stronger relative performance from silver [1]. Futures markets also reflected the surge, with September silver contracts on Comex surging to $38.46 an ounce, reflecting a rare and wide dislocation between spot and futures prices [1].

Minutes from the US Federal Reserve's June meeting showed a divide among officials over the timing of interest rate cuts, though some expressed openness to easing later this year. Trump has continued to pressure the Fed to lower borrowing costs, further supporting precious metals [1]. Silver miners rallied alongside the metal, with US-listed shares of Hecla Mining Company (NYSE:HL) rising 6.3%, Coeur Mining (NYSE:CDE) gaining 5.2%, Pan American Silver Corp. (TSX:PAA, NASDAQ:PAAS) adding 3.3%, and Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) edging up 1.2% [1].

Junior companies saw even steeper gains in Toronto, with Excellon Resources Inc (TSX:EXN, OTCQB:EXNRF) soaring 13.9%, Aftermath Silver Ltd (TSX-V:AAG, OTCQX:AAGFF) up 12%, Santacruz Silver Mining Ltd (TSX-V:SCZ, OTC:SZSMF) climbing 7.7%, Power Metallic Mines Inc (TSX-V:PNPN, OTCQB:PNPNF) up 5.5% and Arizona Gold & Silver Inc (TSX-V:AZS, OTCQB:AZASF) 3.3% [1].

The Silver Institute has projected a fifth consecutive annual supply deficit, with rising industrial demand—particularly from the solar energy sector—expected to provide a long-term tailwind [1]. The solar energy sector's increasing demand for silver is a significant driver, as silver is used in solar panels due to its high electrical conductivity.

The tariff announcement on copper imports by the US President has also contributed to the silver rally. The tariff, set at 50%, is significantly higher than market expectations and has caused a surge in US copper futures prices by 13% [2]. This announcement has raised concerns about inflation and demand destruction, as copper is a key indicator of economic growth. However, the tariff could benefit domestic mining companies, such as Freeport-McMoRan, which have seen their stock prices surge this year [2].

Analysts predict that the tariff will initially benefit COMEX copper prices, as the exchange reflects the cost of importing metal into the U.S. However, the impact on LME copper prices may be negative in the short term, as the U.S. has been stockpiling copper, which could lead to an oversupply in non-U.S. markets once the tariff takes effect [2]. The tariff is expected to take effect on or before August 1, according to the Commerce Secretary [2].

The silver rally has been bolstered by a weaker US Dollar and expectations of interest rate cuts by the Federal Reserve. A weaker dollar tends to propel silver prices up, as the asset is priced in dollars. Additionally, lower interest rates make silver more attractive to investors, as it is a yieldless asset [3].

Silver's dual role as a safe-haven and industrial metal has amplified its appeal in the current environment. The metal's strong bullish momentum has led to a YTD high of $37.73, with a move above $38.00 potentially exposing the $39.50–$40.00 zone [3]. The uptrend remains intact within a rising parallel channel, supported by the 20-day and 50-day Simple Moving Average (SMA), providing additional support at $36.53 and $34.91, respectively [3].

Major brokerages, including Goldman Sachs, J.P.Morgan, and Morgan Stanley, have forecast slower global growth for late 2025 due to economic uncertainty fueled by tariffs and geopolitical tensions. The US economy is expected to grow between 1% and 2% this year, with tariffs pushing prices higher while softening labor markets help avoid a potential wage-price spiral [4].

References:
[1] https://www.proactiveinvestors.com/companies/news/1074607/silver-surges-to-13-year-high-as-tariff-fears-fed-uncertainty-boost-demand-1074607.html
[2] https://www.ainvest.com/news/imposes-50-copper-tariff-futures-surge-13-2507/
[3] https://www.mitrade.com/insights/news/live-news/article-2-952363-20250711
[4] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3T50KY:0-brokerages-expect-global-growth-to-slow-in-late-2025-on-tariffs-geopolitical-tensions/