Silver Markets Navigate Geopolitical Turmoil and Structural Shifts

A sharp geopolitical development triggered a surge in safe-haven demand on Monday, propelling silver prices nearly 4% higher. The precious metal, trading around $75 per ounce, is once again approaching the psychologically significant $76 threshold. This rally was sparked by the detention of Venezuelan President Maduro by U.S. forces, an event that prompted a classic flight to safety among investors.

Silver entered this period of instability from a position of notable strength. The metal recorded its strongest annual performance since 1979 in 2025, posting a gain of 147%. It had reached an all-time high of $83.62 per ounce in late December, setting the stage for volatile trading.

The immediate catalyst is the U.S. intervention in Venezuela. President Trump's announcement that the U.S. would guide the nation toward a "proper political transition" has introduced significant uncertainty, further compounded by threats against Colombia and Mexico. This has elevated the perceived geopolitical risk across the region, bolstering demand for assets like silver.

Conflicting Forces: Safe-Haven Demand vs. Technical Selling

While geopolitics provides upward momentum, a substantial technical headwind is forming on the horizon. The Bloomberg Commodities Index is undergoing a drastic rebalancing. Silver futures, which currently constitute 9% of the index, are slated to be reduced to less than 4%.

Should investors sell immediately? Or is it worth buying Silber Preis?

Analysts at TD Securities estimate this will force the sale of approximately 13% of the total open interest in the COMEX silver market. These sales, valued at around $5 billion, are expected to occur over the next two weeks. The typically low liquidity following the holiday season could amplify these price movements, making the technical support level at $70 a critical zone to watch.

Persistent Supply-Demand Deficit Intensifies

Beneath these short-term dynamics lies a persistently tight fundamental picture. The market is grappling with its fifth consecutive annual structural deficit. A major contributing factor is China's dominant role in refined silver production, accounting for 60 to 70% of global supply. New Chinese export restrictions on refined silver, set to take effect in January 2026, threaten to tighten an already constrained supply chain.

Demand remains robust across industrial and technological sectors. Solar panel producers, electric vehicle manufacturers, and the broader electronics industry continue to secure large volumes. Furthermore, signaling from the U.S. Federal Reserve regarding potential future interest rate cuts helps reduce the opportunity cost of holding non-yielding precious metals.

Key Data Ahead

Market participants are now looking ahead to Friday's U.S. employment report for clues on the Fed's policy path. Until then, the situation in Venezuela is likely to remain a dominant theme. The coming fortnight will serve as a crucial test, revealing whether the geopolitical risk premium can outweigh the substantial technical selling pressure from the index rebalancing.