Silver Is Having a “Trading Places” Moment in the Shutdown Economy

Silver isn’t only seeing a revival as a fashion trend; it’s also seeing a resurgence with investors. Like the cost of gold, silver prices have been soaring of late, hitting a record $50.13 a troy ounce earlier this week as investors continue to seek out safe-haven assets.

That broke the previous record, $48.70 per troy ounce, which had stood since January 1980—just ahead of the infamous “Silver Thursday” bust. Billionaire brothers William, Nelson, and Lamar Hunt—the latter of whom founded the Kansas City Chiefs—stockpiled an estimated third of the global silver supply over the course of a decade to hedge against the declining value of the dollar. But when regulators stepped in, prices dropped and they failed to make a margin call, sending a panic through the markets and inspiring part of the plot of Eddie Murphy and Dan Aykroyd’s 1983 comedy, Trading Places.

The current surge in silver prices—which have rallied more aggressively than even those of gold—is due to “strong and growing demand for silver, combined with a persistent supply deficit,” says Peter Grant, vice president and senior metals strategist at Zaner Metals.

Mining output has been stagnant, especially with the closures of copper mines in Indonesia and South America, Grant tells Vanity Fair. But demand for silver has continued to increase due to its industrial applications and its relative security as an investment “amid sticky inflation, expectations for further Fed easing, geopolitical, trade, and fiscal uncertainty, and a government shutdown.”

The skyrocketing interest in gold may also be a factor: “Silver is often seen as a less expensive safe haven,” Grant says.

Investors in the United States and beyond have been seeking out such safe havens recently—a sign that “investors are preparing” for economic headwinds, as Juan Carlos Artigas, regional CEO (Americas) and global head of research for the World Gold Council, told VF last month.

That cuts against President Donald Trump’s promise that the US would enter a “golden age” under his watch—and underscores the profound global economic uncertainty he has ushered in with his trade war, which has intensified in the past week amid tensions with China.

Beijing last week announced further restrictions on rare earth exports. In response, Trump threatened to enact a 100% tariff on Chinese goods. Trump appeared to back off the idea, somewhat, after markets responded with a massive sell-off on Friday: “Don’t worry about China, it will all be fine!” Trump posted Sunday. But his trade representative, Jamieson Greer, said on Tuesday that a 100% tariff in the coming weeks was still on the table: “A lot depends on what the Chinese do,” Greer told CNBC.

The mixed messages speak to the unpredictability that Trump has injected into the world economy: “The degree of uncertainty is huge,” as London Business School professor Richard Portes put it to The New York Times on Tuesday, “and that has consequences for the global economy.”