Silver prices increased, reaching approximately $48.80 per troy ounce during Asian trading, following China’s RatingDog Manufacturing PMI decline from 51.2 in September to 50.6 in October. Demand for the precious metal grew after US President Trump announced plans to restrict China’s access to Nvidia’s advanced chips, potentially escalating US-China trade tensions.

The weak Chinese PMI data added to market caution, boosting silver’s appeal as a safe haven. Silver is crucial in various sectors like electronics and solar panels, and China’s industrial demand is significant despite recent PMI figures. Traders are also awaiting the US ISM Manufacturing PMI data, which could impact market dynamics.

Chinese rating agency RatingDog noted a weaker-than-expected October PMI, which was forecast at 50.9. Moreover, the US government’s prolonged shutdown added economic uncertainties, further underpinning silver’s attractiveness to buyers.

Silver remains popular for those looking to diversify portfolios or hedge against inflation, with options to purchase physically or through investment vehicles like Exchange Traded Funds. Factors influencing its price include geopolitical events, industrial demand, and its relationship with the US dollar and gold. Silver’s industrial role, especially in electronics and solar, impacts its price significantly.

With Silver breaking above $48.80, we see clear signs of renewed safe-haven demand driven by multiple factors. The fresh US-China trade tensions over semiconductor access, coupled with a prolonged US government shutdown, are creating significant market uncertainty. This environment supports assets like Silver, pushing prices toward the key psychological level of $49.00.

The slowing manufacturing data from China adds another layer to this situation. While the RatingDog PMI reading of 50.6 was weak, we note the official NBS Manufacturing PMI for October 2025 also dipped to 49.9, indicating a contraction for the first time since June. This dual impact of weakening industrial demand and rising global economic fears is paradoxically bullish for Silver’s role as a haven.

Here in the US, the six-week government shutdown is beginning to weigh on the economy and the dollar. Recent reports from the CBO last week estimated the shutdown could be trimming as much as 0.2% from Q4 GDP growth, which has helped push the US Dollar Index (DXY) below the 103.50 support level. A weaker dollar typically makes dollar-priced commodities like Silver more attractive to foreign buyers.

Given these conditions, we are seeing volatility expectations rise, with options markets pricing in larger price swings for the coming weeks. The Cboe Silver Volatility Index, for instance, has climbed over 15% in the last two sessions alone, reflecting traders’ moves to hedge against or speculate on significant upside potential. Many are looking at call options expiring in December 2025 and January 2026 to capture this momentum.

This setup reminds us of the market in late 2019, where geopolitical trade friction led to a sharp rally in precious metals. The Gold/Silver ratio, which currently sits near 75, remains historically high, suggesting to us that Silver may have more room to run relative to gold if this trend continues. We will be closely watching the upcoming US ISM Manufacturing PMI data for further direction.