Silver soars to record $59 as ETF buying collides with supply squeeze; crypto rout deepens ahead of Fed
Silver blasted to an all-time high near $59 per ounce, doubling year-to-date, as investors piled into ETFs against a tightening physical market. The move lit up commodities screens even as Bitcoin and altcoins slumped and traders turned to the Federal Reserve’s next signals for direction across FX and risk assets.
Silver’s breakout spotlights haven and industrial demand
Silver’s surge to about $59/oz underscores a powerful mix of scarcity and investment appetite. Reports of a supply crunch have met heavy inflows into silver-backed exchange-traded funds, lifting prices to fresh records. With no yield to offset higher borrowing costs, the metal’s next phase will hinge on rate expectations: softer real yields typically favor precious metals, while a stickier Fed stance could cool momentum.
Beyond its role as a monetary hedge, silver sits at the nexus of electrification and renewable energy, feeding demand from solar and advanced manufacturing. That dual profile—haven and industrial—has intensified the rally as investors diversify amid macro uncertainty.
Crypto liquidation accelerates as sentiment sours
Digital assets fell sharply, with Bitcoin down about 7% to $84,966. Ether slid roughly 29% and XRP lost about 25%, extending a broad drawdown as risk appetite faded. Traders are bracing for upcoming Fed commentary after a bruising stretch that saw one prominent crypto-exposed company set a $1.44 billion reserve, cut its outlook and hint at potential Bitcoin sales—sending its shares lower.
XRP’s slide came despite an expansion of its Singapore license footprint, illustrating that regulatory milestones are being overshadowed by cyclical flows and macro uncertainty. Meanwhile, the RLUSD stablecoin’s market capitalization climbed to about $1.26 billion, a sign that some investors are parking funds in dollar-linked tokens as volatility rises.
China’s green-tech export machine meets Western trade pushback
China’s exports of new energy vehicles, solar equipment and batteries topped $120 billion, helped by falling prices that are accelerating the global green transition. But escalating EU and U.S. tariff threats—focused on subsidy concerns—highlight a building policy risk that could reshape trade flows, with implications for the euro, the yuan and global equities. Any escalation may add to inflation frictions while reordering supply chains across autos, clean energy and storage.
AI data centers ignite a power-and-labor supercycle
The AI buildout is rippling through labor markets and utilities. Construction wages tied to data centers have jumped roughly 25–30%, with skilled roles commanding $100,000-plus amid acute shortages. Power demand from data centers is expected to triple by 2035 to around 106 GW, underpinned by an estimated $580 billion wave of investment. The strain on grids and potential for higher electricity prices could reverberate across commodities and inflation, reinforcing the bid for certain industrial and precious metals and reshaping utility sector earnings.
FX and rates: what to watch next
– A firm dollar and higher real yields would normally cap precious metals, but the scale of silver ETF demand and supply tightness has overwhelmed that relationship in recent sessions.
– Risk-off moves from crypto and tariff headlines could support the dollar and pressure high-beta FX, while haven flows rotate between metals and the greenback.
– Traders are tuned to Fed communication for clues on the path of policy and real yields—key drivers of cross-asset volatility from metals to EM currencies.
Key points
- Silver hit a record near $59/oz, up roughly 100% year-to-date, driven by supply tightness and strong ETF inflows.
- Bitcoin fell 7% to about $84,966; Ether dropped 29%, XRP 25%, with traders eyeing Fed remarks.
- A major crypto-linked company set a $1.44 billion reserve, cut its outlook and signaled potential BTC sales; shares slid.
- China’s NEV, solar and battery exports surpassed $120 billion; cheaper prices are aiding adoption, but EU/U.S. tariff risks are rising.
- AI data center boom: construction pay up 25–30%, many skilled roles above $100k; power demand seen tripling to 106 GW by 2035 on roughly $580 billion of investment, straining grids and lifting electricity prices.
Market FAQ
Why did silver hit a record high?
A squeeze in physical supply collided with strong ETF buying, pushing silver to new highs. Its dual role as a monetary hedge and an industrial metal tied to electrification amplified the move.
How do Fed rate expectations impact silver and the dollar?
Lower real yields generally support non-yielding assets like silver and can weigh on the dollar. Conversely, a higher-for-longer Fed stance tends to support the greenback and cap metals. Traders are watching upcoming Fed remarks for guidance.
What’s driving the crypto selloff?
Risk appetite has faded ahead of Fed commentary, sparking broad deleveraging. Bitcoin dropped about 7% to $84,966, while Ether and XRP saw steeper losses. Company-specific headlines—such as a large reserve build and a weaker outlook at a crypto-exposed firm—added pressure.
Does XRP’s regulatory progress in Singapore change the outlook?
Licensing expansion is positive for long-term adoption, but near-term price action is dominated by macro risk and liquidity. Regulatory clarity helps, yet cyclical factors are currently in the driver’s seat.
How could EU/U.S. tariffs on Chinese green-tech exports affect markets?
Tariffs could slow price declines in EVs, solar and batteries, potentially lifting inflation pressures while reshaping supply chains. That mix could support the dollar and weigh on cyclicals and the euro, depending on the scope of measures.
What does the AI data center boom mean for commodities and utilities?
Tripling power demand by 2035 and a $580 billion investment wave point to tighter electricity markets and higher prices. Utilities with capacity and grid upgrades may benefit; metals tied to electrification and energy infrastructure could see stronger demand.
What should FX traders watch next?
Fed communications on real rates, any escalation in U.S.-EU tariff actions, and follow-through in crypto and metals volatility. Positioning around these catalysts is likely to drive swings in the dollar, EM FX and commodity-linked currencies.
This article was produced by BPayNews for informational purposes and market context.
