Silver and copper have climbed to the forefront of the commodity markets by the end of 2025. While gold prices have largely trended sideways after their record high in October, silver and copper have reached new highs and increasingly attracted the attention of both institutional and private investors.
Silver has almost doubled this year – with the majority of the increase occurring in the past two months. The trigger was a historic shortage in the London reference market, amplified by strong demand from India and sharply rising inflows into silver-backed ETFs. Copper, in turn, is benefiting from expectations of structural bottlenecks due to electrification and shifted trade flows following US tariff announcements.
Silver: Supply Shortages, ETF Inflows, and Record Volatility
Silver is currently in the spotlight of metal trading. Following the rally of recent weeks, the price is trading significantly above previous highs, although gold, platinum, and palladium have not shown comparable movements recently. In London, the bottleneck has eased somewhat as additional metal quantities were delivered to warehouses. In other markets, however, supply remains tight – inventories in China are at their lowest level in a decade.
Analysts highlight the momentum of the recent surge. The price trend is steeper and more short-term than in previous bull market phases, and purchases are more concentrated, according to traders. Since the gold record in mid-October, the gold price has largely traded sideways, while silver gained more than 11% and reached a new all-time high.
In parallel, trading in silver ETFs has significantly increased. In the largest exchange-traded silver fund, the iShares Silver Trust, implied options volatility recently jumped to its highest level since early 2021 – at which time the market had briefly received attention from meme stock speculators. Within one week, almost $1 billion flowed into the fund, more than into the largest gold ETF during the same period. Market observers see this as a normalization of the previously low silver allocation by Western investors.
Copper: Electrification, Tariffs, and Arbitrage Drive a Structural Bull Market
While silver is strongly influenced by financial demand, physical demand is paramount for copper. The industrial metal price climbed to a new record level of over $11,600 per tonne on the London Metal Exchange last week. Drivers include, on the one hand, growing electrification due to the expansion of data centers for AI applications, and on the other hand, large-scale infrastructure and energy transition projects.
In addition, there is a politically induced shift in trade flows. US tariff announcements on copper at the beginning of the year had temporarily driven Comex prices above LME prices, thereby creating attractive arbitrage opportunities. Trading companies such as Mercuria, Trafigura, and Glencore exploited the price difference to increasingly supply metal to the USA.
Although certain standardized copper qualities were later exempted from tariffs, the US government signaled that it is considering a renewed expansion of these measures. This uncertain tariff situation contributes to keeping material in the US market and further tightening global supply.
On the supply side, the market already sees only a thin pipeline of new projects. At the same time, disruptions in large mines repeatedly lead to production shortfalls. Against this backdrop, analysts speak of “structurally” positive fundamentals for copper: rising demand from electrification with limited growth on the production side.
Open-Ended Fluctuations – Corrections Possible Without Breaking the Long-Term Narrative
For both silver and copper, recent developments have clearly pushed price curves into previously untested areas. For silver, part of the scarcity results from arbitrage transactions between reference markets, as well as from ETF inflows and inventory shifts, while copper is affected by tariff effects and diversions of physical flows towards the USA.
Portfolio managers point out that part of the scarcity is based on factors whose duration is difficult to assess. From the perspective of some market participants, short-term declines of 10 to 15% in both metals would not fundamentally question the longer-term arguments – structural deficits in copper and persistently strong investment demand for silver.
One thing is clear, however: silver and copper are currently the metals attracting the most attention in the futures markets. How long this phase will last and where the current rally will end remains open – especially in an environment characterized by macroeconomic uncertainties, politically influenced trade flows, and high market volatility.
