Silver prices rose in the European market on Monday, maintaining their gains for the fourth consecutive day, heading towards touching a 14-year high, amid strong flows and demand for the white metal.
The price increase is supported by the decline in the US dollar in the foreign exchange market, following less aggressive comments from one of the key Federal Reserve members regarding the future of US interest rates.
The Price
• Silver prices today: Silver rose by 1.0% to $38.55, from an opening price of $38.17, after recording a low of $38.10.
• At Friday’s settlement, silver prices rose by about 0.1%, marking the third consecutive daily gain, supported by the weakening of the US dollar.
• Silver prices lost 0.6% last week, marking the first weekly loss in the last three weeks, due to correction and profit-taking from the 14-year high of $39.13 per ounce.
Strong Demand
Silver prices have risen by about 7% since the beginning of July, heading toward a third consecutive monthly gain, thanks to strong industrial demand for the white metal, alongside a surge in retail demand, as the metal is considered undervalued compared to gold, which is trading near its historical highs.
Industrial Demand
Silver is widely used in green technology industries, such as solar panels, electric vehicles, and electronics, due to its excellent conductive properties.
Global forecasts suggest that the solar energy sector could consume 30% of annual silver production by 2030, as each solar panel requires about 20 grams of silver.
Global industrial demand has already reached record levels, and it is expected to reach 710 million ounces by 2025, which could further drive silver prices higher in the second half of this year.
Chinese Demand
Recent positive data from Beijing has renewed hopes of economic recovery in China, which will reflect in improved demand and the withdrawal of metals and commodities in the world’s largest consumer.
In recent months, Chinese authorities have implemented a series of financial and monetary stimulus measures to support the economy, the world’s second-largest economy, in an attempt to recover from economic stagnation.
Retail Demand
Retail traders, in search of financial assets to hedge against the risks associated with the current shift in global central bank policies toward monetary easing, view silver as the most cost-effective and undervalued asset at the moment.
The current rise in silver prices comes with retail traders’ awareness that the white metal is moving further away from its real value compared to gold, which is trading near its historical levels.
The US Dollar
The US Dollar Index fell by 0.6% on Monday, continuing its losses for the second consecutive session, moving away from a three-week high, reflecting the ongoing decline in the US dollar against a basket of major and minor currencies.
Aside from profit-taking, the US dollar continues to decline following comments from some Federal Reserve officials regarding the potential for a rate cut in July.
Federal Reserve Governor Christopher Waller stated on Friday that he prefers a rate cut at the July meeting, as he believes tariffs are likely to have a limited effect on inflation.
Waller added that the underlying data “does not indicate a healthy private-sector labor market,” and that the Fed “needs to get ahead” of any potential slowdown in employment.
Waller’s comments came amid near-daily criticism from US President Donald Trump toward Fed Chairman Jerome Powell for hesitating to cut interest rates.
