Historically, silver has performed strongly during rate cut cycles. Peter Krauth, author of The great silver bullhighlights that silver prices have risen an average of 332% over the last three such cycles.
“Interest rate cuts often stimulate economic activity, and silver, which is a crucial industrial and investment metal, benefits significantly,” Krauth said.
Demand for silver linked to AI and transition to green energy
Krauth also noted that silver is crucial in emerging sectors such as electric vehicles (EVs), solar energy and AI-driven technologies. The growing green energy transition, which is heavily dependent on silver for solar panels and EV charging stations, is expected to further increase demand.
Advances in AI, especially the rise of data centers that require significant energy, could also drive demand for silver as solar energy becomes essential for sustainable energy solutions.
Additionally, infrastructure investments, coupled with recession recovery efforts, will likely support silver price growth.
Krauth pointed out, “Government spending on infrastructure during recessions typically drives demand for silver because it is widely used in industrial applications.”