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Commodities Silver

Silver Price Rises Over $33 Amid Safe-Haven Demand Even as US Fiscal and Tariff Issues Bite

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  • May 23, 2025
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Silver prices have risen to over $33 per troy ounce, driven by increasing safe-haven demand with increased uncertainty about the US fiscal deficit and uncertainties surrounding tariffs affecting industrial demand. Even though it had dipped in recent times, silver’s attraction as a hedging asset balances issues affecting manufacturing units, such as the photovoltaic sector, that depend greatly on silver. President Trump’s “One Big Beautiful Bill” passage in the US House, expected to expand the budget deficit, and Moody’s lowering of the US credit rating are contributing to the market jitters. At the same time, industrial demand remains underpinned by strong growth in China’s and Europe’s renewable energy industries. KEY LOOKOUTS • Watch how the Senate reacts to Trump’s “One Big Beautiful Bill” and its impact on the US budget deficit, which will inform safe-haven demand for silver. • Watch additional credit rating news and debt projections, as declining fiscal health might push more investors to silver as a hedge. • Monitor trends in the photovoltaic and renewable energy industries, particularly in China and Europe, as these markets have a significant influence on silver industrial consumption. • Note any shifting in US-China trade relations and tariff policies, which may influence silver demand within manufacturing and industrial uses. Investors need to carefully monitor the Senate’s treatment of Trump’s “One Big Beautiful Bill” because its influence on the US budget deficit will shape safe-haven demand for silver. Moreover, Moody’s recent US credit rating downgrade indicates growing fiscal risks that could drive more investors towards precious metals as a hedge. Industrial demand continues to be important, as China’s and Europe’s growing renewable energy sectors continue to power silver usage. In the meantime, continued trade tensions and tariff issues between the US and major manufacturing allies such as China may press down on silver’s industrial consumption, complicating the metal’s price picture. Silver prices are bolstered by safe-haven demand as US fiscal worries rise and credit ratings get downgraded. Chinese and European renewable energy industrial demand is robust, but trade tensions and tariff issues remain threats to the outlook for silver. •  Silver price (XAG/USD) has surged past $33 per troy ounce, buoyed by safe-haven buying as a result of fiscal uncertainties. •  The US House of Representatives approved President Trump’s “One Big Beautiful Bill” that added $3.8 billion to the budget deficit. •  Fears surrounding the increasing US fiscal deficit and debt levels are keeping commodity prices, including silver, suppressed. • Moody’s lowered the US credit rating from Aaa to Aa1, citing increasing federal debt and expanding budget deficits. • Industrial use of silver, particularly by the photovoltaic and renewable energy sectors, continues to be firm due to expansion in Europe and China. • Trade tensions and tariff worries are eroding demand for silver in primary manufacturing industries. • Silver’s price direction is shaped by a combination of safe-haven demand and volatile industrial use in the midst of worldwide economic uncertainty. Silver is attracting notice as investors seek shelter with increasing worries regarding the United States’ fiscal stability. Recent political events, such as the approval of a large budget bill in the House of Representatives, are questioning the nation’s rising debt and deficit levels. These fiscal uncertainties are spurring demand for silver as a safe-haven asset, even when general challenges are affecting its industrial application. XAG/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, silver still dominates in industries such as renewable energy, with robust expansion in solar and wind power in Europe and China bolstering demand. Yet, persistent tensions in trade and tariffs pose problems to the manufacturing industry, which is much dependent on silver. This mixture of circumstances makes it a complicated backdrop for silver, weighing against its attractiveness as a safe haven while acknowledging its industrial significance. TECHNICAL ANALYSIS Silver (XAG/USD) has crossed above the critical $33.00 resistance level, indicating fresh bullish pressure on the back of safe-haven demand. The price is now consolidating slightly above this mark, and it implies that investors are balancing the ongoing fiscal and trade uncertainty. Important levels to focus on are the $32.50 zone, which has resisted in the recent trading sessions, and resistance around $33.50, which may test the vigour of the current upward trend. Momentum gauges suggest guarded optimism, but any abrupt changes in US fiscal policy or industrial demand can rapidly impact price direction. FORECAST Silver prices may continue to increase if safe-haven demand increases amidst increasing fears about the US fiscal deficit and downgrades in the country’s credit rating. Higher geopolitical or economic uncertainty tends to increase investors’ interest in precious metals as a store of value. Also, robust industrial demand from growth in China’s and Europe’s renewable energy industries—particularly the photovoltaic industry—may further underpin silver prices in the medium term. Conversely, silver experiences downward pressure because of persistent trade tensions and tariff uncertainties that can suppress demand in major manufacturing industries. Should the economic conditions in the US stabilize or should the Senate adjust fiscal policies to alleviate deficit concerns, safe-haven demand for silver can get decimated. Additionally, any slowdown in industrial growth or diversion to other materials in manufacturing will also cut down the consumption of silver, capping its price appreciation.

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Commodities Silver

Silver Price Falls to $32 as Ceasefire Hopes and US Downgrade Weigh

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  • May 20, 2025
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Prices for silver have fallen to the $32 an ounce level amid increased hopes of a possible ceasefire between Russia and Ukraine, damping safe-haven demand. This was in spite of the fact that the metal’s losses were partly supported by Moody’s downgrade of the US sovereign credit rating, which indicates fears about the rise in debt and fiscal issues. Also, softer US inflation data and poor retail sales lifted expectations for rate reductions by the Federal Reserve this year, introducing additional complexity to silver’s short-term outlook as investors balance geopolitical events against economic indicators. KEY LOOKOUTS • Observe how developments or reversals in Russia-Ukraine ceasefire negotiations impact silver’s safe-haven demand and price action. • Watch for continued US credit rating developments and additional downgrades that may influence investor sentiment and precious metals. • Watch for upcoming Fed speeches and data releases that may reinforce or change market expectations for 2025 interest rate reductions. • Follow inflation reports, retail sales, and other economic releases that may add credibility or undermine silver’s attractiveness as a hedge against economic instability. Investors should closely monitor several factors that could shape silver’s price trajectory in the coming weeks. Progress in Russia-Ukraine ceasefire negotiations remains a critical driver, as any breakthrough could reduce safe-haven demand and weigh on prices. Meanwhile, further developments regarding the US sovereign credit rating, especially potential additional downgrades, may impact market confidence and support precious metals. Federal Reserve policy cues will also be instrumental, with future speeches and economic reports releases affecting rate cut expectations during 2025. US inflation and retail sales data will still remain important in dictating silver’s attractiveness in the face of general economic uncertainty. Important points to observe are developments in Russia-Ukraine ceasefire negotiations, which will alleviate safe-haven demand for silver. Further, news regarding the US credit rating and Federal Reserve policy directions will drive investor attitude and direction. Economic releases on inflation and retail sales will also affect silver’s future. • Prices of silver are declining towards $32 due to hopes over possible Russia-Ukraine ceasefire negotiations. •  Geopolitical tensions subside, weakening safe-haven demand for silver. •  Moody’s recent reduction of the US sovereign credit rating is only partially mitigating silver’s decline. • Weaker US inflation data supports Federal Reserve rate cuts in 2025 expectations. •  Disappointing US retail sales dampen economic growth expectations, potentially supporting silver. • Markets are expecting two Fed rate cuts this year, which are likely to start in September. • Future Fed speeches and economic releases will be pivotal for silver’s short-term direction. Silver prices have eased recently in the face of increasing expectations of a ceasefire between Ukraine and Russia. This is alleviating geopolitics tensions, which have historically fueled demand for safe-haven metals such as silver. Meanwhile, there are still worries over the US economy, with recent statistics pointing to slowing growth and easing inflation, which causes investors to closely monitor economic policy shifts. XAG/USD DAILY PRICE CHART CHART SOURCE: TradingView Additionally, driving the market is Moody’s downgrading of the US credit rating, which indicates long-term fiscal problems. Although this action has brought some hesitation, investors are also eyeing coming indicators from the Federal Reserve and overall economic patterns. Collectively, these factors form a complicated backdrop to silver, as global events and economic conditions continue to influence its allure. TECHNICAL ANALYSIS Silver (XAG/USD) has been trending below major support levels at $32.50, indicating bearish pressures in the short term. The price of the metal is heading towards the $32.00 psychological support, which traders will be keeping an eye on for possible buying interest or a breakdown. Moving averages are treading downwards, and momentum indicators are indicating diminishing buying pressures. But any undoing of geopolitical tensions or change in economic statistics can precipitate technical rebounds, and thus the $32 level becomes a key pivot point in the near future. FORECAST Prices for silver could rebound in case geopolitical tensions erupt again, especially if ceasefire negotiations between Russia and Ukraine falter or break down. Fresh uncertainty tends to lift demand for safe-haven assets such as silver. Also, if future US economic data are disappointing or inflation proves sticky, investors would look to silver as a haven against economic uncertainty. Any signal from the Federal Reserve that rate cuts are going to be postponed or less aggressive than anticipated would also favor silver prices. Downside-wise, movements towards a peaceful settlement between Russia and Ukraine could continue to mitigate safe-haven demand, further pressuring silver prices. Enhanced global economic conditions or better-than-anticipated US data may diminish the metal’s popularity as a non-yielding asset. Additionally, stabilization or enhancement of the US credit rating may revive investor trust in conventional markets and put pressure on precious metals. Finally, a more rapid pace of Federal Reserve rate increases or postponed cuts will most likely make silver less desirable, resulting in continued falls.

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