Silver rose for a second straight day, trading near $90.00 per troy ounce during Asian hours on Thursday. Demand for safe-haven assets increased as uncertainty grew around White House economic policy.
In Tuesday’s State of the Union address, Donald Trump gave no sign that tariffs will ease. Section 122 tariffs were raised to 10%, after earlier threats of 15%. This followed a Supreme Court ruling 10 months ago that struck down country-specific tariffs under IEEPA.
Geopolitical Risks Support Prices
Geopolitical tensions also lifted prices. Trump threatened military action against Iran if talks fail. Iran said US bases in the Middle East would be targets, putting tens of thousands of US service members at risk. US-Iran nuclear talks were scheduled for Thursday in Geneva.
Silver’s gains may be capped as expectations for near-term Federal Reserve rate cuts fade. Austan Goolsbee said progress on inflation has stalled and that 3% inflation is still above the 2% target. Susan Collins said keeping rates steady for some time appears appropriate.
IMF Managing Director Kristalina Georgieva said tariffs have partly pushed up US goods inflation. She added that a federal funds rate of 3.25%–3.5% would support a return to full employment, and that reducing public debt will require decisive fiscal action.
With silver near $90.00, markets are facing elevated uncertainty tied to US policy and Middle East tensions. This backdrop points to large price swings in the weeks ahead. Derivatives traders may be better served preparing for volatility rather than betting on a single direction.
Positioning For Volatility
The Geneva talks with Iran are a key catalyst that could drive prices higher. If negotiations break down, silver could move toward $100 as safe-haven demand grows. One way to position for this is with call options, which can capture upside while limiting risk if diplomacy succeeds.
At the same time, the Federal Reserve remains focused on inflation, which is still near 3%. In 2024, inflation stayed stubbornly high—often above 3.1%—and that delayed rate cuts. If the economy shows continued strength, the market could lean further into a “higher for longer” rate outlook. In that case, put options can help hedge against a sharp pullback from current highs.
With strong forces on both sides, a strategy that benefits from a big move either way—such as a long straddle—may make sense. It could profit from a surge driven by conflict or a drop if Fed hawkishness takes over sentiment. Today’s price is far above the $25–$30 range seen through much of 2024 and 2025, which suggests a quick return to calm is unlikely.
Silver is also outperforming its peers. The gold-to-silver ratio has tightened sharply from around 85:1 in 2024, which suggests silver is currently the preferred safe-haven. Traders should watch this ratio closely, as a reversal may be an early sign that momentum is shifting away from silver.
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