Key Points
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Traders pushed silver and copper ahead of gold on supply concerns.
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Investors drove record inflows into silver ETFs.
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Copper gained on electrification demand and US tariff pressures.
Silver and copper have become the top metals heading into 2026 as traders prepare for tighter supply across major markets. Both metals have outperformed gold in recent weeks, drawing heavy interest from institutional desks and retail traders.
Silver’s surge has been steep. Prices have nearly doubled this year, with most of the gains coming in the past two months during a historic supply squeeze in London. India’s demand and rising interest in silver-backed exchange-traded funds added more pressure.
The squeeze has eased a bit as more shipments arrive in London vaults, but tightness has appeared elsewhere. Inventories in China are at their lowest in ten years.
Silver Rally Driven by Fast Buying and Sharp Swings
Marex Group analyst Ed Meir noted that the rally has taken on a sharper shape than previous cycles. The buying has been intense and packed into a short window.
Silver has outpaced gold since bullion reached a record on October 20. Gold has held steady while silver climbed more than 11 percent to new highs. Copper has followed with gains of almost 9 percent.
Options volatility in the iShares Silver Trust rose to its highest level since early 2021. More than $1 billion moved into the ETF in the past week, outpacing inflows into the largest gold fund. Western investors, who had low exposure to precious metals, are now flooding back in.
Retail traders have also returned to silver. CME data shows strong demand for micro futures contracts. A wave of call spreads on Comex silver for February traded last week, representing 25 million troy ounces in bets on further rallies.
The scale of the move has pushed silver far above historical averages. Bloomberg Intelligence strategist Mike McGlone noted that prices sat at an 82 percent premium to their five-year average on December 2. Meir warned that there are few technical markers to judge where the rally might top out.
Copper Strengthens on Electrification and US Tariff Moves
Copper is benefiting from a different set of forces. Demand for electrification to power AI data centers and new clean-energy projects has lifted forecasts for long-term consumption. Prices reached more than $11 600 a ton on the London Metal Exchange last week. Volatility on March Comex contracts jumped as traders placed new bets on gains.
US trade policy has added more fuel. President Donald Trump’s decision in February to seek tariffs on copper pushed New York futures far above London prices, creating a profitable arbitrage. US imports surged as trading houses including Mercuria, Trafigura and Glencore moved metal into the country.
StoneX Financial trader Xiaoyu Zhu said copper’s downside is limited because supply disruptions at major mines are colliding with rising demand.
Even after Trump temporarily spared some forms of the metal from tariffs, trading houses have accelerated shipments again after he pledged to revisit duties next year.
Pacific Investment Management portfolio manager Greg Sharenow noted that global balances have tightened as metal shifted into the US. He said a short-term pullback of 10 to 15 percent in either silver or copper would not alter their long-term outlook. Much of the tightness stems from continued arbitrage flows.
