Chinese silver imports rose to more than 400 tons in both June and July, doubling the average of 200 tons per month last year.
Chinese supply and demand for silver
The rapid increase in Chinese demand has raised concerns about a possible “silver squeeze,” where supply may not be able to meet rising needs, especially in silver-dependent industries such as electronics and renewable energy.
Analysts warn that this imbalance between supply and demand could lead to significant global price increases, especially as silver plays a crucial role in technological manufacturing and clean energy initiatives.
Recovery of the US dollar and geopolitical tensions
Meanwhile, the US dollar has recovered from its lowest level since July 2023, although it remains under pressure. Expectations of a 50 basis point rate cut by the Federal Reserve are keeping the dollar volatile, with markets estimating a 65% chance of such a move.
Stronger-than-expected US retail sales, which rose 0.1% in August, gave the dollar a brief boost, further depressing silver prices.
Despite the dollar’s recovery, geopolitical risks – ranging from rising tensions in the Middle East to North Korean missile tests – continue to fuel investor uncertainty.