Up more than 40% in a week… Silver ETNs ‘on a tear’ [Stock+]

Leveraged silver surges in the 40% range in a week

Silver tops $90 an ounce for the first time on record

Driven by expected U.S. rate cuts and geopolitical jitters

Supply tightness and rising industrial demand also underpin gains

Some see silver reaching as high as $100

Experts: “Watch near-term volatility”

As silver prices set fresh records day after day, related exchange-traded notes (ETNs) have posted nearly 50% gains over the past week, according to data. Analysts cite a mix of factors including expectations for U.S. rate cuts, geopolitical tensions, and expanding demand from the artificial intelligence (AI) industry. Experts say the uptrend could continue, but warn investors to be mindful of short-term volatility.

According to the Korea Exchange on the 20th, eight of the top 10 ETNs by return over the past week (as of the previous trading day) were silver-linked products. Over the period, ‘N2 Leverage Silver Futures (H)’ gained 47.94%, while ‘Korea Investment Leverage Silver Futures (H)’ and ‘Mirae Asset Leverage Silver Futures B’ jumped 22.67% to 47.84%. Leveraged products track twice the daily return of the underlying asset.

By contrast, ETNs that bet on a decline in silver prices performed poorly. Over the same period, the five worst performers—including ‘Samsung Inverse 2X Silver Futures (H)’, down 35.14%—such as ‘Mirae Asset Inverse 2X Silver Futures B’ and ‘Shinhan Inverse 2X Silver Futures B’, plunged 18.18% to 35.05%.

With international silver prices surging, performance among silver-based ETNs has also diverged. On the 19th (local time), March-delivery silver futures on the New York Mercantile Exchange rose 6.49% to $94.28 an ounce. The rally has extended after silver first broke above $90 on the 14th. Over the past month alone, silver has jumped 44.56%, far outpacing the rise in international gold prices (7.15%).

The prospect of U.S. rate cuts is cited as one factor driving the rally in silver. As pressure from U.S. President Donald Trump for monetary easing persists, concerns have grown over potential damage to the Federal Reserve’s independence as prosecutors investigate allegations that Chair Jerome Powell committed perjury before Congress last year. Since the start of the year, geopolitical tensions—such as U.S. airstrikes on Venezuela and political instability in Iran—have also reinforced demand for safe-haven assets.

Falling inventories in China, a major producer and consumer of silver, alongside expanding industrial demand, has also helped propel prices higher. Typically, more than half of silver is used for industrial purposes such as solar panels, electric vehicles, and AI-related electronic components. This is also cited as a reason silver’s gains have stood out in the gold-silver-copper rally.

Markets expect the uptrend to continue, with some forecasting silver could climb as high as $100 an ounce. Global investment bank Citigroup raised its three-month silver price target to $100 an ounce from $62. Still, with prices having spiked sharply in a short period, some warn that a pullback is possible. The Chicago Mercantile Exchange (CME) has been raising margin requirements since last month after the sharp rise in silver prices.

Hwang Byung-jin, a researcher at NH Investment & Securities, said: “Risk factors are emerging that could amplify short-term downside volatility in silver prices, including fatigue after a steep rally, uncertainty over U.S. tariffs, and price headwinds in the futures market (profit-taking by investors amid margin adjustments).”

Hong Sung-gi, a researcher at LS Securities, said, “The market is already in the middle of a ‘boom-bust cycle,’” adding, “It wouldn’t be surprising if silver rises to $100 an ounce or retreats to $50.” He continued, “CME is likely to raise margin requirements again if prices climb further,” and forecast that “market volatility will remain very elevated” given past instances in which sharp margin hikes were followed by abrupt price drops.

Ko Jeong-sam, Hankyung.com reporter jsk@hankyung.com