Global silver market faces strain amid trade war concerns
The global silver market is experiencing significant stress as trade-war fears unsettle investors, with key indicators flashing warning signs.
Millions of ounces of silver are moving between trading hubs, signaling months of potential disruption ahead, News.Az reports, citing Bloomberg.
A surge in rates to borrow the precious metal has become the latest sign of alarm, with anxiety building over the impact of further tariffs from US President Donald Trump. That’s sparked a dash to ship silver into the US in a bid to capture premium prices in New York, possibly causing a squeeze in London.
Precious metals — gold as well as silver — have been upended this year, as Trump challenges the global trade order. That’s spurred demand for havens, and also opened up rare pricing dislocations between key markets. While spot silver has gained about 17% this year — making it one of the best performing commodities — futures in New York have done even better.
On a physical level, the tariff concerns — especially levies against Canada and Mexico, as well as wider reciprocal curbs that may kick in next month — have drawn vast quantities of both gold and silver out of London into US vaults. But given their relative value and density, gold tends to be air-freighted, with silver often taking far longer voyages, typically by ship.
Lease rates — the cost of borrowing metal, generally for a short period — have jumped. One-month rates for silver topped 6% this month after a larger spike in February. That partly reflects concerns about fast-depleting stockpiles in the UK capital, with holdings hitting a record low last month. In addition, not all of what remains is available given it’s tied to exchange-traded products.
The US imports about 70% of its silver from Canada and Mexico, which have borne the brunt of the Trump administration’s moves on trade so far. Ottawa subsequently announced 25% counter tariffs on about C$30 billion ($20.8 billion) of US-made items, including silver. Since then, Trump has reiterated his desire for April 2 to mark a wave of new levies.
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