As interest rates fall, metals like silver become more attractive to investors due to lower yields on bonds and savings accounts.
Rising industrial demand and green technology are driving the silver price
A major driving force behind silver’s recent rally is its growing role in green technology, particularly solar energy. Silver, essential in several industries, has become a crucial component of solar panels, making it a crucial player in the transition to renewable energy.
Unlike gold, silver’s industrial applications are vast and include electronics and medical equipment.
According to The Silver Institute, industrial demand for silver reached a record 654.4 million ounces in 2023, an increase of 11%.
This is the third year in a row that demand has exceeded supply, thanks to the increasing adoption of green technologies. As the renewable energy sector grows, silver’s practical value is expected to continue to drive prices.
Federal Reserve actions and market sentiment influence silver
In the US, the Federal Reserve’s interest rate cuts have been a key factor affecting silver prices. While the Fed cut rates by 50 basis points in September, expectations for further cuts have been tempered due to strong economic indicators.