The silver price continued its upward trend this week, reaching a record high of $93.75 per troy ounce on Thursday morning. As a result, the gold/silver ratio briefly fell below 50 for the first time since March 2012. The silver price has increased by approximately 30% since the beginning of the year. For comparison, the price of gold increased “only” by 7% during the same period. Last year, silver has already outperformed gold significantly, with prices rising by almost 150%, notes Carsten Fritsch, commodity analyst at Commerzbank.

Trump Says He’s Easing Tariff Concerns, Silver Pulls Back 7%

“Now, U.S. President Trump has announced that he intends to negotiate bilateral agreements to secure supplies of key minerals. This has temporarily eased tariff fears. As a result, the silver price has fallen more than 7% from the record high mentioned above. With lower tariff risk, more silver from COMEX inventories could flow to China, where silver is currently very stringent. Despite the risk of U.S. tariffs, 97.5 million ounces, or over 3,000 tonnes tonnes As of early October silver flowed from COMEX stocks.”

“Much of this amount likely went to London, where severe shortages occurred in the fall. However, the recipient of these supplies was also likely to be China, where listed inventories have fallen to their lowest level in approximately 10 years. Declining COMEX inventories can therefore be seen as an indicator of a tight silver market, and therefore also the reason for the acute price escalate since October. As such, the silver price remains well supported even without tariff risk.”

“The introduction of the modern silver futures contract, announced by CME as owner of the COMEX on February 9, could provide further headwind. This contract will have a 100-ounce lot size and is therefore likely to appeal primarily to retail investors. Silver futures contracts traded on the COMEX have a 5,000-ounce lot size, making them a less suitable investment vehicle for retail investors.”