- The price of silver can be seen as the demand for sure refuge counteracts concerns about raw materials.
- Trump’s “One Big Beautiful Bill” went through the US House of Representatives and now addresses the Senate.
- The concerns about debt and US tariffs undermined the demand for silver in the photovoltaic industry.
The price of silver (XAG/USD) advances after registering losses greater than 1% in the previous session, around $ 33.10 per Troy ounce during Friday’s Asian negotiation hours. Raw materials sensitive to manufacturing, Including silver, they faced challenges due to the growing concerns about the increase in fiscal deficit in the United States (USA). However, the increase in the demand for safe refuge in the face of these fiscal concerns could compensate for the threat related to the demand surrounding such raw materials.
On Thursday, the “One Big Beautiful Bill” of the US president, Donald Trump, went through the US House of Representatives and is on his way to the Senate. The US House of Representatives approved Trump’s budget for a vote. The proposal is expected to increase the deficit at 3.8 billion dollars, since it would offer fiscal relief on tips revenues and cars manufactured in the US, according to the Congress Budget Office (CBO).
Silver attracts sellers as the uncertain economic conditions of the US, together with concerns about tariffs, undermine the strong impulse of the photovoltaic industry. Silver is used in various industrial applications, such as electronics, solar panels and automotive components.
In the first quarter of 2025, China’s wind and solar capacity increased to almost 1,500 GW due to a 60 GW jump in photovoltaic energy. Given China’s position as one of the world’s largest manufacturing centers, the country’s industrial demand is significant. In addition, the production of solar energy in Europe also increased by 30% per year in the first quarter.
Moody’s reduced the US credit rating of AAA1 and predicted that US federal debt is expected to reach around 134% of GDP by 2035, compared to 98% in 2023, with the budget deficit that is expected to be extended to almost 9% of GDP. This deterioration is attributed to the increase in debt service costs, the expansion of rights programs and the fall in tax revenues.
FAQS SILVER
Silver is a highly negotiated precious metal among investors. Historically, it has been used as a value shelter and an exchange means. Although it is less popular than gold, operators can resort to silver to diversify their investment portfolio, for their intrinsic value or as a possible coverage during periods of high inflation. Investors can buy physical silver, in coins or bullion, or negotiate it through vehicles such as the funds quoted in the stock market, which follow their price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can cause the price of silver to shoot due to its safe refuge status, although to a lesser extent than that of gold. As an asset without performance, silver tends to climb with lower interest rates. Its movements also depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (XAG/USD). A strong dollar tends to maintain the price of silver at bay, while a weaker dollar probably drives rising prices. Other factors such as investment demand, mining – silver supply is much more abundant than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, particularly in sectors such as electronics or solar energy, since it has one of the highest electrical conductivities of all metals, surpassing copper and gold. An increase in demand can increase prices, while a decrease tends to reduce them. The dynamics in US economies, China and India can also contribute to price fluctuations: for the US and particularly China, its large industrial sectors use silver in several processes; In India, the demand for consumers for precious metal for jewelry also plays a key role in pricing.
Silver prices tend to follow gold movements. When gold prices go up, silver typically follows the same path, since their status as shelter is similar. The gold/silver ratio, which shows the number of ounces of silver necessary to match the value of an ounce of gold, can help determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that silver is undervalued, or that gold is overvalued. On the contrary, a low ratio could suggest that gold is undervalued in relation to silver.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
