Silver prices have seen a remarkable surge this year, climbing by 27% to reach their highest levels in over a decade. While gold typically garners the spotlight as a traditional store of value, silver has been making a strong performance, driven by a dual force: growing interest from investors wary of economic turbulence and robust industrial demand, particularly from solar panel manufacturers.
Unlike gold, which is primarily used for jewelry and as a financial hedge, about 80% of silver demand comes from the industrial sector. Despite earlier expectations of a decline in demand due to former President Trump's trade policies—especially the trade war and reduced incentives for renewable energy—the industrial appetite for silver has remained resilient, unexpectedly boosting prices.
In contrast, other markets have experienced mixed movements. Oil prices declined despite ongoing geopolitical tensions in the Middle East. President Trump's announcement of a two-week window before making a decision on Iran helped ease fears of imminent military action, leading to a 3% drop in Brent crude prices after they had peaked earlier in the week.
Base metals such as copper and aluminum were influenced by fluctuations in the U.S. dollar. A weaker dollar temporarily lifted these commodity prices by making them cheaper for international buyers, while a subsequent rebound in the dollar led to reduced global demand. Geopolitical instability further kept traders cautious, limiting bullish momentum in these markets.
Gold prices, meanwhile, edged lower as the Federal Reserve maintained interest rates, reducing the appeal of non-yielding assets like gold. Despite ongoing tensions, the U.S. dollar remained the preferred safe haven in the short term.
European natural gas prices also dipped as fears of an escalating conflict between the U.S. and Iran subsided. Nevertheless, weekly gains persisted due to lower Norwegian supplies, which forced Europe to increase its imports of liquefied natural gas (LNG).
Overall, these market movements reflect the persistent uncertainty that dominates global trading environments, with commodity prices reacting sharply to any diplomatic or economic signals.
