While major European Union states have condemned the tariff threats as blackmail, EU retaliation is a real possibility, driving a risk-off move in global stock markets and encouraging others to buy silver to hedge against uncertainty.
At 10:20 GMT, XAGUSD is trading $93.15, up $3.03 or +3.36%.
China Export Restrictions Create Supply Shock
In addition to today’s bullish events, recently China implemented a new licensing framework for silver exports that effectively restricts 60-70% of global supply to domestic use, replacing the previous quota system and creating immediate supply shock concerns.
Fed Investigation Raises Speculation of Earlier Rate Cuts
Meanwhile, early last week, the Department of Justice opened a criminal probe into Federal Reserve Chair Jerome Powell that threatens the central bank’s autonomy. Some saw it as a threat from President Trump to influence the Fed into lowering interest rates sooner than expected. This would have had bullish implications for silver.
Retail Investor Demand Surges with Record ETF Inflows
Retail investor demand has also been a key driver of silver’s price surge since November 21. According to reports, individual investors poured $922 million into silver ETFs over 30 days, with the iShares Silver Trust recording $69.2 million in retail inflows on Wednesday, January 14, marking the second-largest single day of buying on record.
Iran Tensions Add to Geopolitical Risk Premium
The quest for Greenland isn’t the only geopolitical risk present at this time. Traders are still monitoring the potentially explosive situation in Iran. Early last week, silver rallied after President Trump threatened military action against the country. Even though Trump refrained from the move on January 15, causing a 7.3% drop in silver, the area remains a hot bed with the U.S. moving a carrier into the region this week.
