Silver (XAG/USD) is trading near $78.40 on Tuesday at the time of writing, up 2.90% on the day, extending a streak of four straight days of gains. The white metal benefits from a supportive macroeconomic backdrop, dominated by rising risk aversion and continued expectations of monetary easing in the US.
Silver’s bullish momentum is primarily fueled by renewed safe haven flows amid rising geopolitical tensions. The US authorities’ arrest of Venezuelan President Nicolas Maduro and his transfer to New York to face drug-related charges adds a new source of uncertainty to global financial markets. Statements by US President Donald Trump, who indicated the possibility of further military action if the interim authorities in Venezuela did not respond to Washington’s demands, reinforced this cautious environment and boosted demand for precious metals.
Silver is also supported by expectations of lower interest rates in the United States. Financial markets are currently pricing in two 25 basis point interest rate cuts by the Federal Reserve in 2026, according to the CME FedWatch tool. A low interest rate environment tends to reduce the opportunity cost of holding non-yielding assets, which structurally supports silver. Meanwhile, recent weakness in the US dollar has helped limit downside pressure on dollar-denominated commodities.
Investors remain focused on upcoming US macroeconomic releases, especially labor market data. The December non-farm payrolls report, due on Friday, may influence expectations about Fed policy. Stronger than expected labor market results may support the US dollar and limit silver’s rise in the near term. Conversely, weaker data would strengthen the case for monetary easing and could increase the bullish momentum of the white metal.
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.
