Jamie Spencer
Silver Struggles Amid Economic Uncertainty
Silver prices fell to over eight-week lows on Friday, as concerns over demand for the industrial precious metal intensified. Fears of a potential recession, exacerbated by U.S. President Donald Trump’s sweeping tariffs, have cast a shadow over silver’s outlook. Unlike gold, which tends to benefit from political and economic uncertainty, silver’s significant industrial demand means its performance is closely tied to broader economic conditions.
Industrial Demand Drives Silver’s Price Struggles
While gold has surged to record highs in 2025, silver has faced difficulties in breaking through its 12-year peak of $34.87 an ounce, which was reached on October 22, 2024. As of the latest trading data, silver is priced at $31.00 an ounce, marking a nearly 9% drop since Trump’s latest tariff announcements on Wednesday. According to the Silver Institute, more than half of the global demand for silver, estimated at 700.2 million troy ounces in 2024, comes from industrial uses such as electronics and photovoltaics. This exposure to industrial activity makes silver more vulnerable to economic slowdowns and trade disruptions.
Gold vs. Silver: A Divergent Path
While gold, traditionally seen as a safe haven in times of uncertainty, has benefited from robust central bank buying and increased flows into gold-backed exchange-traded funds (ETFs), silver has lagged behind. Gold prices hit a record high of $3,167.57 on Thursday, fueled by inflationary fears and geopolitical tensions. However, silver’s industrial exposure has capped its upside, with the gold-silver ratio currently at 100, its highest level since June 2020. Aakash Doshi, global head of gold strategy at State Street Global Advisors, noted, “I would expect silver to lag gold until there is more economic clarity and a resolution in trade and tariff risks, given silver’s exposure to industrial activity and PMIs.”
The Impact of Tariffs on Industrial Metals
Silver, like other industrial metals, has been pressured by fears of global growth and weakened demand due to ongoing U.S. tariff actions and trade tensions. While gold prices have surged as investors flock to safe-haven assets, silver’s reliance on industrial applications has left it vulnerable to broader economic instability. Ricardo Evangelista, senior analyst at ActivTrades, explained, “The upside provided by heightened safe-haven demand will be capped by silver’s negative industrial angle.” He added that silver prices are likely to remain range-bound around the current levels, with support at $33.5 and resistance at $34.5.
ETF Purchases Could Provide Short-Term Support
Despite the challenges facing silver, sustained purchases by ETFs could help silver maintain some momentum and keep pace with gold in the near term. Han Tan, chief market analyst at Exinity Group, suggested that silver’s outlook could improve if the global economic situation does not deteriorate further. “Sustained silver purchases by ETFs should help silver keep up with gold in the near-term, barring a rapidly worsening global economic outlook,” Tan said. As long as demand from ETFs remains strong, silver may continue to see some support, even as global trade tensions weigh on its industrial uses.
Conclusion: Uncertainty Clouds Silver’s Path Forward
Silver’s price movement in the coming months will be closely tied to broader economic conditions, particularly global growth and demand for industrial metals. While gold continues to soar amid economic uncertainty and inflation fears, silver’s dependence on industrial demand means it is more susceptible to the negative effects of trade tensions and recession risks. With the ongoing tariff disputes and potential for a global slowdown, silver faces an uphill battle to regain momentum, though ETF demand may provide some short-term stability.
