Silver has achieved a historic milestone on the Multi-Commodity Exchange (MCX), surging past the ₹3 lakh per kilogram mark for the first time. The precious metal reached a high of ₹3,01,315 per kilogram on the exchange, marking a significant breakthrough in commodity trading.

Geopolitical Tensions Drive Precious Metal Demand

The surge in silver prices comes amid rising geopolitical uncertainties and potential trade volatility. Trump has threatened to impose a flat 10% tariff on European countries that object to Greenland's accession to the US and support the territory. This development has created market volatility that has benefited precious metals as safe-haven assets.

The tariff threat specifically targets eight European countries that have resisted the Greenland acquisition plan, including major economies such as France, Germany, and the United Kingdom. The proposed tariff structure shows an escalating timeline, with the 10% tax beginning on February 1 and increasing to 25% by June.

Broader Precious Metals Rally

Silver's milestone achievement is part of a broader rally across precious metals markets. The geopolitical tensions have increased demand for precious metals as investors seek safe-haven assets amid uncertainty.

Spot gold has increased 1.60% to $4,668.76 per ounce, having previously peaked at $4,690.59. Silver demonstrated even stronger performance with a 3.20% rise to $93.02, reaching a high of $94.12. The rally extends beyond gold and silver, with palladium and platinum also experiencing upward momentum.

Market Implications

The breakthrough of the ₹3 lakh per kilogram threshold for silver on MCX represents a significant psychological and technical milestone for the commodity. The convergence of geopolitical tensions and trade policy uncertainties has created an environment where precious metals are attracting increased investor interest as portfolio hedges.

The escalating nature of the proposed tariff structure, moving from 10% to 25% over a four-month period, suggests that market volatility may continue to support precious metal prices in the near term. This environment has proven particularly favorable for silver, which has outperformed other precious metals in percentage terms during this rally.

Gold and silver have surged to record highs as escalating trade tensions between the US and Europe over Greenland acquisition threats drive increased demand for precious metals. The precious metals rally comes amid threats of significant tariffs and potential retaliatory measures between major economic powers.

Precious Metals Performance

Both gold and silver posted substantial gains as investors sought safe-haven assets amid geopolitical uncertainty. The following table shows the current performance of key precious metals:

As of 8:11 a.m. in Singapore, spot gold reached $4,668.76 per ounce, representing a 1.6% increase, after previously peaking at $4,690.59. Silver demonstrated even stronger performance, rising 3.2% to $93.02 per ounce and reaching a high of $94.12. Both palladium and platinum also posted gains during the trading session.

Trade War Escalation

The precious metals surge follows Trump's threats to impose tariffs on eight European countries that have resisted his plan to purchase Greenland. The targeted countries include major economies such as France, Germany, and the United Kingdom. The proposed tariff structure involves a 10% tax beginning February 1, which would escalate to 25% by June.

European Response Strategy

European leaders are preparing urgent conferences in the coming days to discuss potential countermeasures to the threatened tariffs. According to sources familiar with the discussions, member states are evaluating multiple response options, including retaliatory taxes on $108 billion worth of US imports.

Market Drivers and Federal Reserve Concerns

Precious metals have experienced significant increases throughout 2025, following major geopolitical developments including the US detention of Venezuela's leader and intensified threats regarding Greenland acquisition. Additionally, the Trump administration has escalated criticism of the Federal Reserve, raising concerns about central bank independence and encouraging the debasement trade, where investors avoid government assets and currencies due to debt level concerns.

Market Outlook

The current precious metals rally reflects broader investor concerns about trade stability and monetary policy independence. The combination of threatened tariffs, potential retaliatory measures, and Federal Reserve independence concerns has created a favorable environment for safe-haven assets like gold and silver.