Industrial demand remains the primary driver, with consumption rising 7% in 2024. Silver’s essential role in renewable energy, electric vehicles, and electronics continues to expand. Projections suggest that by 2050, solar panel manufacturing alone could consume nearly the entirety of annual silver output. With limited new mining projects and much of the accessible high-grade silver already extracted, these deficits could persist for years.
How Will Gold and Fed Policy Shape Silver’s Performance?
Gold’s recovery from recent losses highlights continued investor demand for safe-haven assets. Silver often tracks gold but with greater volatility, reflecting its dual role as both an industrial and precious metal. As the Federal Reserve signals only modest easing in 2025 – with 50bps of total cuts projected – the stronger dollar may present near-term resistance for silver. However, any softening in the dollar, driven by weaker economic data or shifting Fed rhetoric, could open the door for silver to rise alongside gold.
Traders will be closely monitoring Powell’s post-meeting comments and inflation data. Should gold attract significant buying interest as a hedge against inflation or geopolitical risk, silver is likely to follow.
