Silver Hits ~$94: Tariffs, China Rules, ETF Rush!!

Silver Hits ~$94: Tariffs, China Rules, ETF Rush!!

Silver rallied sharply this week, reaching roughly $94 per ounce on a confluence of concrete drivers that pushed prices well above prior levels. Clear policy moves and inventory squeezes — not idle speculation — triggered heavy buying across retail, institutional and industrial channels. Below is a concise, investor-focused breakdown of the events that moved silver prices and what they imply for supply, flows and near-term price action.

Immediate price triggers

Tariff announcements and safe-haven buying

Late in the week, U.S. tariff threats against several European trading partners created a spike in geopolitical risk. Risk-averse investors turned to precious metals as a hedge, driving a rapid inflow into silver alongside gold. The result was a pronounced repricing: silver jumped into the mid-$90s per ounce range intraweek, amplifying volatility across trading venues.

China’s export licensing tightened supply

On January 1 China implemented a tighter export licensing regime for silver, effectively prioritizing domestic industrial users — notably renewables and electric vehicles — and limiting outbound shipments. Analysts estimate that the new rules touch a majority of refined supply from major producers. In practice, fewer ounces flowed to international vaults and dealers, reducing available physical stock outside China and accentuating the price move.

Physical tightness: evidence and mechanics

Record ETF and retail flows

Exchange-traded product holdings rose sharply, with inflows outpacing recycling and mine growth. Retail demand — from small investors and coin/bullion buyers — compounded the squeeze. Dealers reported rapid sellouts and lengthening delivery times for popular silver bars and rounds, signaling an actual deficit in deliverable metal rather than only a futures-driven price spike.

Refinery bottlenecks and recycling limits

Refineries and processors are operating near capacity. Increased scrap and recycled volumes are constrained by processing throughput, and some refiners have delayed consignments because of staffing and logistical frictions. Think of the physical pipeline as a narrow pipe: when inflows surge, pressure builds and backlogs form; here that pressure showed up as rising premiums and depleted inventories.

Structural backdrop and data points

Multi-year supply deficit

Industry reports indicate this is the fifth consecutive year with a net supply deficit, measured in tens of millions of ounces annually. That structural shortfall means that episodic demand shocks — whether from policy or geopolitics — more readily translate into price spikes than in a long surplus environment.

Forecast revisions and analyst views

Major banks raised near-term forecasts amid the tightening. One prominent lender lifted its 2026 average silver projection significantly, citing persistent physical tightness and elevated gold. Forecasters still note downside risk if supply improves or if speculative flows unwind quickly, but the present tone is decidedly bullish compared with last year.

Regional demand highlights

India and retail spikes

Indian domestic prices on commodity exchanges saw one-day moves that reflected heightened local retail buying, often tied to safe-haven and festival season demand. Higher domestic premiums and rapid off-take from dealers reinforced pressure on international deliverable stocks.

Industrial consumption

Longer-term industrial demand from photovoltaics, electronics and EV components remains robust. With China restricting exports, domestic industrial users in Asia can secure supply first, pushing more short-dated demand into open purchasing channels abroad.

What this means for commodity investors

For investors, the recent moves underscore the importance of distinguishing tangible supply drivers from rumor. Policy actions and licensing changes created a measurable drop in available metal outside China; ETF and retail inflows then absorbed remaining liquidity, producing the rapid price advance. Position sizing should reflect the elevated volatility: directional exposure can profit from continued tightness, but liquidity risk and large intraday swings may hurt leveraged or short-tenor strategies.

Conclusion

Silver’s surge to about $94/oz this week was driven by identifiable events — tariff threats that spurred safe-haven buying, China’s export licensing that cut available refined supply, and record ETF and retail demand that drained inventories and raised premiums. Structural deficits and refinery constraints amplify those moves. These are not speculative whispers; they are concrete supply-and-demand shifts that will likely continue to influence prices until physical flows normalize or policy settings change.

For investors and analysts, the priority is monitoring deliverable inventories, ETF flows, Chinese export data and any additional trade-policy announcements. Those observable metrics will remain the best guide to short-term price direction and risk management.