Silver is riding the same macro tailwinds lifting gold. Former President Trump’s threat of massive new tariffs on Chinese imports roiled global markets and reignited safe-haven demand. Meanwhile, traders are now pricing in two Federal Reserve rate cuts this year, pulling Treasury yields and the U.S. Dollar Index lower.
The dollar’s 0.6% drop on Friday made dollar-denominated metals more attractive to foreign buyers, fueling both ETF inflows and speculative interest in silver. This risk-off backdrop continues to strengthen the metal’s appeal as a store of value.
Backwardation Signals Physical Squeeze in Silver Market
One of the most telling developments is the current backwardation in the silver market. December 2025 Comex silver futures were quoted at $48.03—more than $2 below the spot price—highlighting a significant squeeze in available physical supply.
“Silver’s backwardation is a loud signal — physical demand is crushing paper supply,” said Alex Ebkarian, COO at Allegiance Gold. “If backwardation holds and physical demand keeps rising, silver breaking and sustaining above $50 is very realistic.”
This rare market structure typically points to robust near-term demand and difficulty sourcing physical metal, reinforcing the bullish bias.
