Silver price surpasses 100 dollars an ounce amidst market uncertainty

London - The price of silver surpassed the 100-dollar-an-ounce threshold for the first time on Friday. This was driven by its safe-haven status amid uncertainties sparked by Donald Trump's policies and by industrial demand in the solar and electronics sectors.

Having more than doubled in value in under four months, silver gained 3.94 percent around 4:05pm GMT, reaching 100.03 dollars an ounce. This follows a surge in gold, which is approaching 5,000 dollars an ounce.

The recent surge in precious metals was supported by tensions surrounding Greenland. The US president stated his intention to acquire the territory, threatening European allies with customs tariffs if they opposed the move.

Markets remain wary, even after a relative easing of tensions this week in Davos. Donald Trump withdrew his threats and announced a memorandum of understanding regarding the autonomous Danish territory.

The frequent policy reversals by the US administration are creating a climate of uncertainty. This is diverting investors from the dollar and government bonds, which are typically considered competing safe-haven assets to gold and silver.

Investors are “reluctant to abandon” precious metals, which are physical assets, “in case Donald Trump wakes up with another controversial idea,” explained Dan Coatsworth, an analyst at AJ Bell.

Pressure and criticism from the White House occupant against the Federal Reserve and its chairman, Jerome Powell, to further lower US key interest rates, are reinforcing this reluctance. These actions are also fuelling fears of a “Fed under influence,” added Stephen Innes of SPI Asset Management.

More broadly, the market is also seeking to hedge against inflation and the rising debt of nations worldwide. Investors are trying to escape a “loss of value” in currencies.

Silver is also an industrial metal, and “this dual role can amplify both the upward momentum and the downside risk,” highlighted Ole Hansen, an analyst at Saxo Bank.

In this instance, amidst speculative euphoria, the price of silver is being driven by “rumours of a supply shortage,” noted David Morrison, an analyst at Trade Nation.

Demand for silver is expected to grow in the coming years, according to the Silver Institute. This is to supply the photovoltaic and electromobility industries, as well as for the construction of data centres used by the artificial intelligence sector.

This article was translated to English using an AI tool.

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