Silver and copper have overtaken gold as the hot metal trade for 2026, with silver nearly doubling in value this year due to a supply squeeze in the London market and increased demand from India and silver-backed ETFs. Chinese inventories are at decade lows, signaling supply constraints.

Silver’s rally has seen higher volatility compared to gold, with a steep parabolic move in a shorter time frame. Since October, silver has gained over 11% to a fresh record, while copper has climbed almost 9%. Implied options volatility in the iShares Silver Trust rose to its highest level since early 2021.

Western investors are flocking to silver ETFs, with significant room for further inflows as allocation normalizes. Options on Comex silver futures have faced increased demand for protection against wider swings and further rallies. Retail traders are pouring into the market, driving up average volume on micro futures contracts.

The silver rally’s end is uncertain, with resistance levels hard to predict. Copper, driven by growing demand for electrification in AI data centers and clean-energy projects, is seeing supply shortfalls in the years to come. Copper pricing and trade flows have been upended by US tariffs, leading to increased demand for the metal.

Downside for copper prices will be limited due to bullish fundamentals and increasing demand from electrification and the energy transition. Global balances have tightened substantially as material has shifted into the US, with higher US prices favoring keeping the material in the country. The global tightness in metal markets has been fueled by arbitrage trading.

Read more at Yahoo Finance: Silver, Copper Eclipse Gold as Top Metals Bets on Supply Fears