The price of silver (XAG/USD) rose to nearly $74.10 per ounce during the early European hours on Friday. The price of the gray metal rose 148% in 2025, surpassing key levels amid its designation as a critical US metal, tight supply, low inventories, and high industrial and investment demand.
Non-interest bearing silver attracts buyers due to cautious sentiment surrounding the Fed policy outlook. Lower interest rates can reduce the opportunity cost of holding silver. Traders expect the Federal Reserve to cut interest rates two more times in 2026.
Additionally, silver prices are finding support as a weaker US dollar (USD) makes the dollar-denominated metal cheaper for foreign buyers. Markets are preparing for US President Donald Trump to nominate a new Federal Reserve Chairman to replace Jerome Powell when his term ends in May, a move that could push monetary policy towards lower interest rates.
Safe-haven metals, including silver, are receiving support amid rising geopolitical tensions, fueled by recent recriminations between Russia and Ukraine over New Year’s Day civilian attacks and ongoing friction between the United States and Venezuela.
Silver rose amid rising speculative demand in China, pushing Shanghai Futures Exchange premiums to record levels. These higher premiums reflect strong domestic demand and have tightened global supply chains, reflecting earlier inventory pressures in the coffers of London and New York.
Frequently asked questions about silver
Silver is a precious metal that is widely traded among investors. It has been used historically as a store of value and medium of exchange. Although less popular than gold, traders may turn to silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during periods of high inflation. Investors can buy physical silver, in the form of coins or bullion, or trade it through instruments such as exchange-traded funds, which track its price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession could cause the price of silver to rise due to its safe-haven status, although to a lesser extent than the price of gold. As a non-yielding asset, silver tends to rise as interest rates fall. Its movements also depend on how the US dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong dollar tends to keep the price of silver at bay, while a weak dollar is likely to push prices higher. Other factors such as investment demand, mining supplies – silver is more plentiful than gold – and recycling rates can also influence prices.
Silver is widely used in industry, especially in sectors such as electronics or solar energy, as it has one of the highest electrical conductivity of all metals – more than copper and gold. A rise in demand can cause prices to rise, while a fall tends to bring them down. Dynamics in the economies of the United States, China and India can also contribute to price fluctuations: for the United States, and especially China, its large industrial sectors use silver in various processes; In India, consumer demand for the precious metal used in jewelery also plays a major role in determining prices.
Silver prices tend to follow gold movements. When gold prices rise, silver usually follows suit, as its status as a safe haven asset is similar. The gold/silver ratio, which shows how many ounces of silver are needed to equal the value of one ounce of gold, may help determine the relative valuation between the two metals. Some investors may consider a high ratio to be an indication that silver is undervalued, or that gold is undervalued. Conversely, a low ratio may indicate that gold is undervalued compared to silver.
