Silver's Historic Rally Might Only Be Getting Started – Here's Why

Source: Coindoo Original Title: Silver’s Historic Rally Might Only Be Getting Started – Here’s Why Original Link: Silver’s explosive move is no longer a niche macro trade. What started as a hedge against trade tensions has turned into one of the most powerful asset trends of 2025, with prices posting their strongest annual performance since the late 1970s and continuing to hold near record levels into early 2026.

Market commentators point out that silver rose roughly 148% during the 2025 trade war period, outperforming most major asset classes as bonds sold off and crypto remained volatile.

Key Takeaways

• Silver has transitioned from a trade-war hedge into a broad macro and supply-driven asset.
• Relative to global money supply, silver still screens cheap despite record nominal prices.
• Structural deficits and critical-mineral status strengthen the case for sustained upside.

In an environment defined by tariffs, supply-chain fragmentation, and geopolitical shocks, capital has rotated aggressively toward tangible stores of value, pushing gold and silver back into the center of global portfolio allocation.

Silver’s Rally is Rooted in Macro Stress, Not Speculation

Unlike short-lived momentum trades, silver’s advance has tracked closely with real-world disruptions. Each escalation in U.S.-China trade tensions during 2025 coincided with sharp upside moves, reinforcing silver’s role as a hedge against policy uncertainty and currency risk. With global trade becoming less predictable and financial conditions more fragile, safe-haven demand has stayed consistently strong rather than fading after brief headlines.

This dynamic has also exposed a key difference between silver and other “defensive” assets. While government bonds have struggled under rising deficits and inflation risk, silver has benefited from both monetary hedging and industrial relevance, giving it a dual source of demand that few assets can match.

The Valuation Gap: Silver Versus Money Supply

Research from Katusa Research adds another layer to the bullish case. While silver near $90 per ounce represents a nominal all-time high, its valuation relative to global fiat money supply tells a different story. Adjusted for monetary expansion, silver remains well below historical extremes.

Katusa highlights that if silver merely re-aligns with its 2011 ratio to M2 money supply, prices cluster around the high-$90s, a level the market is already approaching. More strikingly, matching the 1980-era ratio would imply prices several multiples higher, underscoring how far silver has lagged global liquidity growth over decades.

Supply Pressure Turns Silver Into a Strategic Asset

Beyond macro and valuation arguments, silver is now facing structural supply constraints. The metal has been officially designated a critical mineral in the U.S., with policymakers proposing multi-billion-dollar stockpiling initiatives. At the same time, the U.S. remains heavily dependent on imports, consuming thousands of tons annually while domestic production lags.

This backdrop has produced five consecutive years of structural supply deficits. With silver embedded in solar panels, electronics, defense systems, and electrification infrastructure, demand is proving far less elastic than in past cycles. Any policy-driven stockpiling or retirement-fund allocation changes could tighten the market further.

Technical Signals Suggest Consolidation, Not Exhaustion

From a technical perspective, silver’s uptrend remains intact. Recent price action shows consolidation near highs rather than aggressive distribution. Momentum indicators such as RSI remain elevated but not extreme, while MACD signals point to cooling momentum rather than a trend reversal. Historically, similar pauses after vertical rallies have preceded continuation moves rather than major tops, especially when fundamentals remain supportive.

At the time of writing, spot silver is trading around $93.45 after a 3.7% surge in the past 24 hours, extending a broader rally across the precious metals complex. Gold and copper have also pushed to fresh all-time highs as investors rush toward hard assets following renewed tariff threats and geopolitical tensions.

Rising geopolitical tensions and escalating trade uncertainty are once again reinforcing demand for metals seen as protection against policy risk and global instability.