Silver Surges to $38 per Ounce Amid Market Scramble Triggered by US Trade Tariffs
On Friday, July 11, 2025, silver prices experienced a significant surge, breaking through $37 and reaching $38 per Troy ounce in London trading. This marked a 14-year high for the precious metal as the market reacted to US President Donald Trump’s surprise imposition of a 50% tariff on copper imports, sparking a rush to secure silver supplies in the world’s largest economy.
Silver Prices Hit New Highs
The London spot silver price touched $37.50 per Troy ounce during midday auctions—a 1.7% increase compared to the previous Friday’s fixing and the highest benchmark price since September 22, 2011. Following the auction, spot trading propelled silver prices above $38, registering a weekly gain of 3.5% in US dollar terms.
This new peak comes as part of a broader rally in precious metals. Gold prices also rose, adding 0.6% over the week to $3,351 per Troy ounce. Meanwhile, platinum and palladium prices saw notable increases in their borrowing costs, indicating heightened demand across multiple metals influenced by the ongoing market dynamics.
Impact of US Tariffs on Copper and Silver Markets
President Trump’s surprise tariffs on industrial copper have disrupted the global metals market, creating a bottleneck for copper supplies while indirectly increasing demand for silver. Known for its industrial uses alongside its bullion value, silver is closely linked to copper as a commodity.
The tariffs have caused a chilling effect on copper imports to the US, triggering a "scramble" to bring in silver, which is similarly used in various industrial applications. This has led to a sharp divergence between silver futures trading in New York’s Comex market and London’s spot bullion prices. The current spread has widened to over 65 cents per Troy ounce—more than three times the level observed the previous weekend.
Increased Arbitrage and ETFs Influence Supply Constraints
The market disruption has resulted in heightened arbitrage activity, with bullion being transported from London to New York to exploit price differentials. Exchange for Physical (EFP) contracts have surged, allowing futures holders to switch into physical bullion, further straining supply.
ICBC Standard, a prominent London bullion clearer, noted that the search for silver ounces is also constrained by ongoing buying from exchange-traded funds (ETFs), especially the iShares Silver Trust (NYSEArca: SLV). Silver ETF holdings have increased for nine consecutive weeks, with June recording the largest relative build since January 2021. This demand spike was amplified during the social media-driven #silversqueeze event earlier this year.
Leasing Costs and Stockpiles Reflect Market Strain
Silver lease rates in London’s principal market climbed sharply—from 1.7% to 5.3% per annum—marking the highest borrowing costs since the tariff announcement on April 2, which notably exempted precious metals from import duties.
Despite these challenges, physical silver stockpiles remain substantial, holding near all-time highs of approximately 497 million ounces—the equivalent of more than seven months of global silver mining output or 2.4 years’ worth of US silver fabrication demand.
Broader Metal Market Dynamics
Other precious metals have mirrored silver’s borrowing cost increases, with platinum and palladium lease rates also rising. Copper prices remain near record levels on US futures markets, further stressed by tariff-driven distortions. U.S. copper stockpiles have swelled, expanding regional supply imbalances and forcing material to be diverted from traditional global exchanges, including the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE).
StoneX analyst Natalie Scott-Gray highlighted these market distortions, suggesting that once implemented tariffs curb imports after August 1, greater availability overseas could restore some balance, enabling copper prices to better reflect global industrial demand rather than tariff-driven scarcity.
Market Outlook
The current silver rally reflects a fusion of geopolitical trade policy, arbitrage pressures, and investor demand fueled by ETF inflows and industrial usage concerns. Former City correspondent and BullionVault’s director of research, Adrian Ash, underscored this complex environment, emphasizing the ongoing supply challenges and elevated borrowing costs that characterize the precious metals markets heading into the second half of 2025. As investors and industry stakeholders continue navigating this evolving landscape, silver’s price trajectory will likely remain sensitive to trade developments, supply chain logistics, and ETF activity, all against the backdrop of broader economic and geopolitical factors.
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Disclaimer: This article provides information for educational purposes and should not be construed as investment advice. Precious metal prices are volatile and can fluctuate due to various market factors. Readers should conduct their own research and consult professional advisors before making investment decisions.