Markets are now anticipating the next Fed rate cut no sooner than June, a shift from previous expectations of a spring easing. A warmer-than-expected CPI print could further delay this timeline, strengthening the dollar and potentially putting pressure on silver prices.
Industrial demand and safe harbor provide support
Silver’s industrial role continues to support prices, driven by robust global demand in sectors such as solar and electronics. Solar panel production, a major source of silver consumption, remains a tailwind, while geopolitical and inflation risks have strengthened silver’s appeal as a hedge.
Gold’s stability in a rising interest rate environment has also provided indirect support to silver. Investors turned to both metals as stocks faltered, with the S&P 500 down 1% so far this year. Concerns about newly elected President Donald Trump’s proposed tariffs and fiscal policies have increased demand for safe havens.
Global returns and speculation are weighing on the markets
The global bond sell-off has further complicated the outlook. UK 10-year government bond yields have reached their highest level since 2008, and rising yields in developed markets are challenging precious metals. Meanwhile, speculation about Trump’s policy direction, including possible tariffs and spending plans, has added to uncertainty. Markets are grappling with whether these measures will fuel inflation or depress growth, creating cross-flows for silver.