Year-to-date, silver has posted gains of up to 18%, highlighting its strong performance in the commodities market
What Factors Are Fueling Silver’s Rise So Far This Year?
Silver prices have climbed by as much as 18% since the beginning of the year. This rally has been supported not only by a weakening US dollar, but also by growing market concerns over potential trade policies under the Trump administration. These concerns have led traders to hedge against possible increases in import costs, triggering short covering activity and driving a rise in silver deliveries to CME warehouses since late 2024. Ongoing economic and geopolitical uncertainties have further bolstered safe-haven interest in precious metals, though silver remains a secondary choice to gold due to its stronger correlation with industrial demand.
Positive sentiment toward China’s economic prospects has also played a role in supporting silver prices. Policy reassurances from Chinese authorities have helped soothe investor worries, despite lingering economic weaknesses. Looking ahead, the Silver Institute anticipates another substantial supply deficit in the silver market for 2025—making it the fifth straight year of shortfall. Industrial consumption is expected to remain the dominant force behind this imbalance, with demand projected to reach a new all-time high.
Going forward, market attention will turn to the broader economic impact of potential new US tariffs, especially in relation to China. Although recent moderation in Trump’s trade rhetoric has reduced expectations of a near-term US recession, the risk of further escalation remains. Any renewed trade tensions could weigh on investor appetite for silver as an industrial asset.
Technical Analysis Shows Silver Trading Within an Upward Channel
From a technical perspective, silver prices remain in an upward trajectory, continuing to trade within a rising channel that has been in place since the beginning of the year. The daily Relative Strength Index (RSI) has recently bounced off its midline, indicating sustained buying interest and suggesting that bulls maintain control of the market. A key resistance level to monitor is around US$34.87, where the upper boundary of the ascending channel may converge with the October 2024 peak.
Copper Poised to Retest Its October 2024 Peak
Copper has similarly benefited from improved sentiment surrounding China’s economic outlook, delivering a solid 15.7% year-to-date gain. Contributing to the momentum, U.S. President Donald Trump signed an executive order last month initiating a review of copper imports, citing concerns over national security and the country’s increasing dependence on foreign supply. This development may trigger preemptive buying activity in anticipation of forthcoming tariff announcements, potentially providing a short-term boost to demand.
Looking ahead, the global push toward net-zero emissions is expected to underpin long-term demand for copper, especially in key green sectors such as electric vehicles, solar energy, and wind power. That said, near-term risks persist. Any unexpected escalation in U.S. trade policies—particularly tariff-related surprises—could undermine global growth expectations and weigh heavily on copper, given its strong ties to industrial activity.
Technical Outlook for Copper: Approaching a Retest of October 2024 High
From a technical perspective, copper’s recent attempt to retest its October 2024 high met with some short-term resistance. However, the broader uptrend appears intact, supported by a pattern of higher highs and higher lows that signals a potential trend continuation. A pullback in the daily Relative Strength Index (RSI) toward its midpoint could present a compelling buying opportunity, as similar RSI reversion levels have coincided with price bottoms on the last two occasions. Should the price retreat further, the US$9,689 per metric ton level stands out as a key support area that could pave the way for the formation of a new higher low.