Silver remained around $31.20 per ounce on Friday and was on track to lose nearly 4% for the week, pressured by demand uncertainties, strong supply, and some profit-taking. A stronger dollar also weighed on silver prices after US President Donald Trump confirmed on Thursday that his proposed 25% tariffs on Mexico and Canada would take effect on March 4, alongside an additional 10% duty on Chinese imports. Hecla Mining Company, the largest silver producer in the US, reported a 13% increase in silver output for 2024, mining 16.2 million ounces (moz), marking the second-highest production level in its 134-year history. On the demand side, US silver coin purchases dropped 27% year-on-year in January to 3.5 moz, the lowest level of January demand since 2018
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply Silver is much more abundant than Gold and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers' demand for the precious metal for jewellery also plays a key role in setting prices.
Source: Trading economi & Fxstreet
