The price of silver (XAG/USD) is attracting some buyers to around $72.90 during Asian trading hours on Friday. The white metal rose more than 140% in 2025, recording its biggest jump since 1979. Silver’s rise is supported by the prospect of further interest rate cuts by the US Federal Reserve in 2026 and safe-haven demand amid geopolitical uncertainty.
Expectations of further US interest rate cuts are weighing on the US dollar and providing some support to US dollar-denominated commodity prices. Financial markets are currently pricing in the Fed cutting interest rates by a quarter point this year. Lower interest rates can reduce the opportunity cost of holding silver, supporting the non-yielding precious metal.
In addition, the price of silver is also supported by purchases by central banks and investors who buy so-called “safe haven” assets due to concerns about global tensions and economic uncertainty.
“Gold and silver prices are witnessing a noticeable rise due to the interaction of many economic, investment and geopolitical factors,” said Rania Gul from trading platform XS.com.
However, the white metal’s potential upside may be limited in the near term due to some profit-taking and portfolio rebalancing. The Chicago Mercantile Exchange (CME) Group, one of the world’s largest commodity trading floors, said that spreads for gold, silver, platinum and palladium will rise again. The notice means that investors will need to put more money on their bets to insure against the possibility of default upon receipt of the contract.
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.
