Silver held steady above $32.20 per ounce on Friday, on track to post its fifth weekly gain in six, reflecting strong demand and favorable market conditions.
Silver set for fifth weekly gain in six
The precious metal found support in a weaker dollar, as concerns over escalating global trade tensions eased. Both the US and China have adopted a more cautious approach to tariffs, with US President Donald Trump and Chinese President Xi Jinping scheduled to discuss trade developments. This dialogue raises hopes of a potential reversal of some of the existing trade restrictions, which would help alleviate market uncertainties.
Silver also benefitted from expectations that the US Federal Reserve will continue cutting interest rates throughout 2025. Markets are pricing in two quarter-point reductions, which has led to an environment of lower yields and increased interest in precious metals as alternative investments. Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets like silver, making it more attractive to investors.
Forecasts on supply
On the supply side, the Silver Institute recently forecasted a fifth consecutive year of significant market deficits in 2025. This is largely due to robust industrial demand, particularly in sectors such as electronics, solar energy, and electric vehicles, which require large quantities of silver. Additionally, strong retail investment, with many investors seeking to hedge against inflation and economic uncertainties, is expected to further tighten market conditions. While consumption in jewelry and silverware has shown signs of weakness, particularly in key markets like India and China, the ongoing industrial demand and investment interest should continue to support silver prices in the near term.
Silver may maintain upward momentum
These combined factors suggest that silver may maintain its upward momentum, with both demand-side drivers and monetary policy conditions playing key roles in supporting prices. As a result, silver remains a focal point for investors looking for safe-haven assets amid broader economic uncertainty and shifting global trade dynamics.
