“The silver market has responded to both geopolitical risks and changing monetary policy,” said a senior market strategist.
The metal’s non-yielding nature makes it attractive during periods of monetary easing, as central banks such as the Bank of Canada are expected to cut rates further, including a possible 50 basis point cut this week.
Hidden military demand driving silver’s strategic importance
A less discussed but increasingly relevant factor influencing silver prices is the military’s secret demand for the metal. Silver’s use in electronics, advanced weapons and medical equipment makes it crucial in the defense industry.
Recent studies suggest that military demand for silver may now exceed that of traditional sectors such as electronics and renewable energy.
Historically, military demand has been largely underreported. U.S. government data on silver reserves has not been shared publicly since the mid-1990s. This hidden demand could lead to supply constraints as global supply chains are already strained by increasing industrial applications.
Global and seasonal factors are driving the outlook for silver
Besides military and geopolitical factors, the upcoming festive season in India has fueled silver buying by local jewelers, pushing prices up further.