Silver (XAG) Forecast: Silver Rally Hits Record on Greenland EU Tariff Crisis

Silver Hits New Record High as Trump’s Greenland Tariff Threats Fuel Safe-Haven Demand

Spot silver hit another record high on Monday after President Trump threatened additional tariffs Saturday on some European countries visibly supporting Greenland while Trump intensifies his desire to buy the Arctic Island. Reuters reported that Trump said he “would impose additional 10% levies from February 1 on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, rising to 25% on June 1 if no deal on Greenland was reached.”

In addition to the current bullish supply and demand situation, institutional and policy risks have resurfaced, leading the market to seek protection by reallocating assets toward safe-haven silver and gold.

While major European Union states have condemned the tariff threats as blackmail, EU retaliation is a real possibility, driving a risk-off move in global stock markets and encouraging others to buy silver to hedge against uncertainty.

At 10:20 GMT, XAGUSD is trading $93.15, up $3.03 or +3.36%.

China Export Restrictions Create Supply Shock

In addition to today’s bullish events, recently China implemented a new licensing framework for silver exports that effectively restricts 60-70% of global supply to domestic use, replacing the previous quota system and creating immediate supply shock concerns.

Fed Investigation Raises Speculation of Earlier Rate Cuts

Meanwhile, early last week, the Department of Justice opened a criminal probe into Federal Reserve Chair Jerome Powell that threatens the central bank’s autonomy. Some saw it as a threat from President Trump to influence the Fed into lowering interest rates sooner than expected. This would have had bullish implications for silver.

Retail Investor Demand Surges with Record ETF Inflows

Retail investor demand has also been a key driver of silver’s price surge since November 21. According to reports, individual investors poured $922 million into silver ETFs over 30 days, with the iShares Silver Trust recording $69.2 million in retail inflows on Wednesday, January 14, marking the second-largest single day of buying on record.

Iran Tensions Add to Geopolitical Risk Premium

The quest for Greenland isn’t the only geopolitical risk present at this time. Traders are still monitoring the potentially explosive situation in Iran. Early last week, silver rallied after President Trump threatened military action against the country. Even though Trump refrained from the move on January 15, causing a 7.3% drop in silver, the area remains a hot bed with the U.S. moving a carrier into the region this week.

Five-Year Supply Deficit Underpins Bull Market

These short-term developments have been the source of volatility lately, but the ongoing supply deficit remains the stabilizing force for this bull market. According to reports, global silver demand has exceeded mine supply for five consecutive years, with industrial applications in solar panels, EVs, and electronics driving consumption while supply remains constrained by silver’s role as a mining by-product.

Technical Outlook: $100 Target in Sight but Correction Risk Looms

Technically, the trend is up and there is no true resistance in sight. Traders are now eyeing the psychological $100 level as their next major target. The only concern is the market’s steep vertical rise, which is often the precursor to a major correction. Moves like the one currently taking place often draw the attention of regulators who have the power to stop excessive volatility with aggressive margin hikes. It was tried in late December, when the CME raised margins twice in a week in a move that has been fully absorbed by aggressive buyers.

More Information in our Economic Calendar.