Silver News

Silver, the less popular of precious metals, is experiencing one of its most remarkable resurgences in recent memory. The greyish metal has seen a historic rally, breaking a four-decade-old price record by going on to hit $53 per ounce this week. Silver's gains have been far bigger than gold's, which were already outstanding. Why is Silver Price Rising? 1. Industrial Demand and Safe-Haven FlightThe current rise is mostly because silver is enjoying increased demand as both an industrial metal and a traditional safe-haven asset. About 60% of silver's use originates from industrial applications, while gold price is primarily driven by investment demand. This structural demand has skyrocketed, mostly because the world is moving toward green energy and advanced technology telecommunication. Silver is essential for making sophisticated electronics and 5G, as well as for solar photovoltaic cells, electric vehicles (EVs), battery systems, and charging infrastructure. This is because it has the best electrical and thermal conductivity. 2. Geopolitical and Trade Tariff Tensions Ongoing conflicts and geopolitical divisions around the world have made assets outside of the traditional Western banking system even more appealing. This "safe-haven" buying has led to record amounts of money coming into silver-backed Exchange-Traded Funds (ETFs) and a rush to buy real bars and coins.Silver is also more appealing as a non-yielding asset in a low-interest environment, as more people anticipate that the U.S. Federal Reserve will lower rates. Lower yields make metals more appealing than bonds, which attracts speculative capital.Elsewhere, rising trade disputes between the U.S. and China and ongoing wars in the Middle East and Ukraine, have made safe-haven buying more popular. Silver, like gold, protects against inflation and currency depreciation. Recent U.S. inflation figures showed surprise increases that made many concerned about prices staying high.A unprecedented short squeeze in London's over-the-counter market has made things worse. Physical shortages have pushed lease rates through the roof and created arbitrage opportunities by buying and selling between London and COMEX futures. Is It too Late to Buy Silver? Is it too late to buy? Not really, but timing is very important. Because silver is so volatile, major corrections can happen. Recent drops in the XAGUSD trajectory make this even more clear, and that trend may give dip-buyers a chance to get in. Also, strong demand and limited supply point to the fact that it's not overbought yet. If the economy stays unstable, the current prices could be a good deal for long-term investors. Generally, most analysts agree that the long-term outlook for silver is still very positive. The green transition will likely maintain industrial demand high over the next ten years, which could keep prices higher. Also, the historically high Gold-to-Silver Ratio shows that silver is still undervalued compared to gold. That means that there is a lot of room for it to go up as this ratio adjusts to normal. From a technical perspective, silver price is slightly overbought, with the daily RSI at 76. Immediate resistance will likely be at $55, and a break above that level could set the next target at the psychological $60 mark. On the downside, the psychological $50 level is likely to offer near-term support. A break below that level could open the pathway to test $48. Action below the Volume Weighted Moving Average (VWMA) at $46.930 will signal a potential bearish takeoover. Silver/USD pair on the daily chart with RSI and VWMA indicators What Are the Risks? Despite the upbeat outlook for silver price, investors need to be careful. The silver market is far smaller and less liquid than the gold market, and that makes it quite volatile. When investor sentiment shifts, silver tends to move more in both directions by a larger amount. For example, concerns of short-term physical shortages have caused some domestic silver ETFs to trade at a significant premium over the international spot price.This short-term price difference is risky because if the physical market gets less tight or investor demand drops for a short time, these premiums could go away, causing rapid losses even if the spot price stays the same. Nonetheless, there is a lot of room for growth in the future. Bank of America estimates that by 2026, silver price could reach $65 because of continued deficits and growth in the industrial sector. In Summary It's not too late for investors to buy silver if they're ready for volatility. There may be opportunities to buy when prices drop, and the forecast signals that the metal is set for gains through 2026. It's wise to think of silver as a long-term investment instead of a short-term bet. Therefore, investors should limit their exposure and look at it from a long-term perspective, focusing on its role in the global effort to transition to green energy. How does silver’s demand outlook differ from gold's in the current rally? Approximately 60% of silver demand is industrial, particularly from solar and EV manufacturing, providing a base for the price that gold lacks. Is it too late to buy silver? Silver’s volatility offers dip-buying chances; long-term value remains with deficits and demand, but timing is key. What is the main risk for investors buying silver after its price rally? The main risk is short-term volatility and the potential for losses if premiums on ETFs caused by physical shortages collapse as market liquidity returns.