Silver Nears Record, Greenland & Bond Markets Panic
Silver prices fell slightly below $94 per ounce on Wednesday, but remained very close to their all-time high. Safe-haven demand remained strong as global markets were shaken by US-European tensions over Greenland and significant volatility in the bond market.
The main trigger came from the escalating political conflict between Washington and Europe. US President Donald Trump threatened eight European countries that rejected his Greenland plan with new tariffs unless an agreement was reached regarding the territory.
Meanwhile, the European Union began considering retaliatory measures. The risk of a trade war has also intensified, prompting investors to hedge their bets and choose safer assets, including precious metals like silver.
Market concerns have been heightened by speculation that Europe could use "financial weapons" in this conflict. Investors are watching for the possibility that Europe could use its large holdings of US assets—from stocks to bonds—as a means of pressure in negotiations.
This issue was further fueled by news that a Danish pension fund plans to exit US Treasuries. While not necessarily triggering large-scale action, rumors like these are enough to raise market anxiety levels.
Meanwhile, volatility in the global bond market is fueling safe-haven sentiment. Bond yields rose following a selloff in Japanese government bonds, indicating investors were demanding "higher yields" to cushion fiscal risks.
The Japanese bond selloff was triggered by fiscal concerns after Japanese Prime Minister Sanae Takaichi proposed eliminating the 8% sales tax on food. The market believes this move could widen the budget burden and increase financing pressures.
Beyond geopolitical and bond issues, silver is also receiving a boost from demand. Retail investors in China, India, and the Middle East are said to have contributed to the global "squeeze" in the silver market, as rising prices attract increased buying interest.
The combination of three factors—the Greenland crisis, trade war fears, and pressure in the bond market—has kept silver in a high zone, despite a slight correction. As long as this uncertainty persists, silver remains vulnerable to wild swings.
5 key points:
- Silver fell slightly below $94/ounce, but remains near its record high.
- US-Europe tensions over Greenland are driving safe-haven demand.
- Trump threatens tariffs on eight European countries; the EU is considering retaliatory measures.
- Markets are concerned that Europe could exploit its holdings of US assets; there are reports that a Danish pension fund wants to exit US Treasuries.
- Japanese bond sell-offs and fiscal concerns, plus aggressive buying by Asian and Middle Eastern retail investors, are also boosting silver sentiment. (asd)
Source: Newsmaker.id
