Silver prices climbed above $33 per ounce on Friday and were on track to rise about 3% for the week, driven by heightened demand for safe-haven assets amid growing concerns over the US fiscal outlook.
Silver set for strong weekly gain
Investor anxiety was stoked by President Trump’s new budget bill—which includes significant tax cuts and expanded defense spending—raising fears of worsening deficits and an expanding national debt. These fiscal risks have fueled uncertainty in broader financial markets, prompting a shift toward hard assets like precious metals.
Adding to the bullish tone, Federal Reserve Governor Christopher Waller suggested that the Fed still sees scope for interest rate cuts later this year, depending on the outcome of ongoing tariff policy developments. Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets like silver, thereby making them more attractive to investors. Waller's comments were interpreted as a dovish signal, reinforcing expectations of a more accommodative monetary stance in the face of geopolitical and economic headwinds.
Strength from data on China wind and solar power capacity
On the industrial side, silver also drew strength from fresh data showing China’s wind and solar power capacity surged to nearly 1,500 GW in the first quarter—bolstered by a 60 GW increase in photovoltaic installations. This rapid expansion underscores China's continued investment in green energy infrastructure, which bodes well for silver demand given its essential role in solar panel production. Analysts note that industrial use accounts for over half of global silver consumption, meaning strong growth in the renewable energy sector could provide a durable tailwind for prices.
Furthermore, the ongoing supply constraints in the silver mining sector, exacerbated by stricter environmental regulations and declining ore grades, add an additional layer of support to the market. With both investment and industrial demand strengthening simultaneously, silver is increasingly viewed not only as a hedge against macroeconomic volatility but also as a key enabler of the global energy transition.
