Silver prices have risen to around $63.75 in the Asian session, driven by increasing industrial demand and its inclusion on the US critical minerals list. The price is further supported by a weaker US Dollar and potential future tariffs.
Silver demand is increasing from sectors such as solar energy, electric vehicles, and artificial intelligence, expected to grow by 2030. Silver’s addition to the US critical minerals list suggests potential tariff policies, tightening its availability globally and boosting long-term demand.
The US Federal Reserve reduced its interest rates by 25 basis points, making the Dollar weaker and silver more appealing to non-US traders. There is a 78% chance that the Fed will hold interest rates steady next month, further influencing silver’s attractiveness.
People invest in silver for its intrinsic value and as a hedge during inflationary periods, often trading it in physical forms or through Exchange Traded Funds. Silver prices are affected by factors like geopolitical instability, interest rates, and the US Dollar’s performance. Its industrial demand, particularly in electronics and solar energy, can also impact price movements, closely following gold trends due to their safe-haven status.
With silver trading near $63.75, we are looking at a potential retest of the all-time high of $65.50 set back in May 2025. The current price action is strong, suggesting that bullish positions are favorable in the coming weeks. Traders should view any minor dips as potential buying opportunities given the supportive fundamental backdrop.
The long-term demand story for silver is getting stronger, making it more than just a precious metal play. The US adding silver to its critical minerals list is a significant development, tightening global supply as American warehouses absorb inventory. This, combined with a reported 15% growth in demand from the solar panel industry in 2025, provides a solid floor for the price.
Monetary policy is also providing a strong tailwind for us. The Federal Reserve’s rate cut this week to a 3.50-3.75% range marks the second cut in this easing cycle, which began in October 2025. A weaker dollar resulting from these cuts makes silver cheaper for holders of other currencies, further boosting its appeal.
Given this environment, buying call options with strike prices above the $65.50 high could be a primary strategy to capture a breakout. We must be mindful that implied volatility has been rising, making options more expensive. Therefore, using bull call spreads could be a more cost-effective way to express a bullish view while capping risk.
We are also seeing silver outperform gold, as the Gold/Silver ratio has fallen from over 85:1 early in 2025 to near 70:1 today. This trend suggests that pairs trading by going long silver futures and short gold futures could be a profitable strategy. This position would benefit from silver’s continued relative strength driven by its unique industrial demand profile.
