Silver prices broke through the $90/ounce level for the first time, with gold also approaching record highs. The precious metals market continues to surge driven by multiple bullish factors such as the threat to Federal Reserve independence, geopolitical tensions, and easing rate hike expectations. Citigroup has raised its three-month target for silver to $100, while Lotus Asset has issued an aggressive forecast of $150 by the end of the year.
(Background recap: Silver breaks $70 and hits a new all-time high! Market cap approaches $4 trillion, next surpassing Apple and Nvidia?)
(Additional context: Complete "cryptocurrency"ification of silver: volatility surges, precious metals have replaced the previous Bitcoin market)

Table of Contents

• Powell faces indictment threat, concerns over central bank independence
• Geopolitical risks boost safe-haven demand
• Silver to surge 150% by 2025, supply continues to tighten
• Speculative enthusiasm spreads from Shanghai to New York
• Analyst: Safe-haven demand will persist, but gains may slow

On Tuesday, silver prices first broke the $90/ounce barrier, with gold also nearing its all-time high. Political attacks on the Federal Reserve, potential further rate cuts in the US, and tense geopolitical situations have added momentum to the rally in precious metals.

Silver soared as much as 5.3% during the session to $91.5535 per ounce, with gold just $10 shy of its historical high. US December core inflation data was below market concerns, but economists note that this data was artificially suppressed by the longest government shutdown in history. The Federal Reserve is expected to pause rate cuts for several months, but the interest rate swap market has already priced in at least two more rate cuts later this year.

Powell faces indictment threat, concerns over central bank independence

The strong start for precious metals this year continues the astonishing rally into 2025. The possibility of Federal Reserve Chair Powell facing criminal charges has once again raised concerns about the independence of central banks. Central bank officials worldwide have voiced support for Powell, while JPMorgan Chase CEO Jamie Dimon warned that such actions could backfire.

Citigroup has raised its three-month target prices for gold and silver to $5,000 per ounce and $100 per ounce, respectively.

Geopolitical risks boost safe-haven demand

Safe-haven demand is also driven by factors such as US President Trump’s detention of Venezuelan leaders, renewed threats over Greenland, and potential violent protests in Iran that could lead to regime change.

Hao Hong, Chief Investment Officer at Lotus Asset Management, said that silver is benefiting from broad capital rotation into commodities:

This rally still has significant room to run this year, with prices possibly reaching $150 per ounce by the end of the year.

Silver to surge 150% by 2025, supply continues to tighten

Last year, silver outperformed gold, driven by short squeezes in October, ongoing tight supply in the London market, and large speculative buying. The rally was 150% for the year. Traders are also awaiting the results of the US Section 232 investigation, which could lead to tariffs on silver imports.

Zijin Tianfeng Futures analyst Liu Shiyao noted:

Concerns over tariffs on silver have caused large amounts of silver to remain in the US, limiting supply to global markets.

Speculative enthusiasm spreads from Shanghai to New York

The latest surge in precious metals highlights the strong influx of investment, with speculative interest spreading from Shanghai to New York. Since late December last year, trading volumes on Comex and the Shanghai Futures Exchange have remained high.

As of 12:31 PM Singapore time, silver rose 4.6% to $90.959 per ounce, gold increased 0.9% to $6,626.43, approaching the all-time high set on Tuesday. Platinum and palladium both gained over 4%, while the Bloomberg dollar index was flat.

Analyst: Safe-haven demand will persist, but gains may slow

Invesco Asset Management global market strategist David Chao said:

Gold and silver as “hedges against inflation or financial instability” are expected to continue this year, but their gains are unlikely to be as strong as in 2025. Due to recent geopolitical uncertainties, gold may outperform silver this year.