Silver Rally Continues, Strongest Since 2011
Silver prices rose to around $42 per ounce on Friday, hitting their highest level since 2011. The main drivers were rising market expectations that the US Federal Reserve would cut interest rates in the future, combined with a weakening US dollar and falling US bond yields. This has made assets like silver—which offer no yield—increasingly attractive as a hedge against inflation and economic uncertainty.
In addition to monetary policy factors, industrial demand for silver has also played a role. Silver's use in renewable energy (including solar panels), electronics, and electric vehicles has begun to increase significantly. Inflows into silver ETFs have also increased, reflecting institutional investors' confidence in the prospects for this white metal. Silver supply itself remains under pressure because production is largely a byproduct of other mines—meaning supply growth is not always responsive to immediate price increases.
While the upward trend is quite strong, there are several risks to be aware of. If upcoming US inflation data is higher than expected, or if the Fed signals a less dovish stance, there is potential for a strengthening of the dollar and US bond yields, which could pressure silver prices. Furthermore, volatility remains high as silver is highly sensitive to economic and geopolitical news. However, in an optimistic scenario—with a confirmed interest rate cut, continued growth in industrial demand, and supply remaining limited—silver prices could continue to rise, perhaps approaching or surpassing $45 per ounce in the near future.
Source: Newsmaker.id
