In just the last 30 days, retail traders have directed over $920 million into silver-linked Exchange Traded Funds (ETFs). This marks the largest influx of retail capital into these instruments on record. The iShares Silver Trust (SLI) and ProShares Ultra Silver (AGQ) are reportedly the primary beneficiaries of this significant investor activity.
The flow of retail capital into silver ETFs has been consistent, with SLI experiencing inflows for 169 consecutive trading sessions. Ashwin Bhakre from VandaTrack, a firm monitoring these market movements, described the current situation as "unprecedented." On Wednesday, SLI recorded its second-highest day of net buying activity ever.
Silver Hits All-Time High as Tariffs Are Avoided
Silver experienced a substantial rally, surging by over 20% in a four-day period. The precious metal reached a new all-time high of $94 on Wednesday. However, it saw a correction of 7.3% on Thursday as some investors took profits.
This price surge occurred while markets awaited President Donald Trump's decision on whether to impose new tariffs on critical minerals, including silver and platinum. Instead of broad tariffs, Trump indicated a preference for one-on-one negotiations with countries and potentially implementing price floors. This announcement followed months of security reviews concerning mineral imports.
The mere anticipation of tariffs had already begun to restrict supply. Warehouses in the United States were reportedly holding increased reserves of silver, awaiting further developments. This situation contributed to a significant short squeeze last year, and its effects on supply dynamics are expected to persist into 2026.
Last year, silver significantly outperformed gold, with its price jumping by nearly 150%. Investors reportedly shifted their focus from gold, which had become relatively expensive, towards silver. Concurrently, rising demand from the solar industry further bolstered silver prices. Speculative trading activity from traders in China also added momentum to the rally.
Ashwin Bhakre noted that silver currently exhibits greater momentum than both gold and cryptocurrencies combined. He also highlighted that year-to-date inflows into silver ETFs have already surpassed twice the three-month average. Bhakre characterized this trend not as a speculative "meme-stock spike" but as evidence of "structural accumulation."
Christopher Wong from Oversea-Chinese Banking Group maintains a positive medium-term outlook for silver. He cited factors such as tight supply, consistent industrial demand, and ongoing investor interest in gold as supporting the bullish sentiment. However, Wong also cautioned that "the velocity of recent moves warrants some near-term caution."
Broader Commodity Rally Driven by Geopolitical Factors
The recent surge in silver prices was part of a wider trend of increased investor interest in commodities. This week, a significant wave of capital flowed into various commodities, with tin, copper, and gold all reaching record levels. The Trump administration's pressure on the Federal Reserve and escalating geopolitical tensions contributed to this broad-based rally.
International events, including the U.S. action against Venezuela's leader, discussions regarding Greenland, and heightened tensions surrounding Iran, have created an environment of uncertainty. This geopolitical instability has driven more investors towards safe-haven assets like silver.