Renewable energy in the crosshairs: the future of solar-powered silver at risk
Trump’s stance on renewable energy could make or break demand for silver in the solar energy sector, which accounts for a significant portion of industrial consumption. Industry experts at the IEA have emphasized that U.S. solar incentive policies have global implications, given America’s role in driving innovation and installation. If renewable energy subsidies are rolled back, this would be a bearish development for silver, as photovoltaic cell production is heavily dependent on the metal. On the other hand, a surprise move toward green energy would create bullish momentum.
Inflationary policies could support demand for safe havens
Trump’s plans for tax cuts and infrastructure spending could fuel inflationary pressures, weakening the US dollar. Economists at Goldman Sachs note that a weaker dollar makes silver more attractive as a hedge, potentially pushing prices higher. Furthermore, the geopolitical risks of a more aggressive foreign policy could strengthen silver’s appeal as a safe haven, with strategists at UBS and Bank of America highlighting this relationship.
Market Outlook: Brace for Volatility, with Mixed Signals
The near-term outlook for the silver market is neutral, but with potential for both bearish and bullish catalysts. If trade relations with China deteriorate, industrial demand could decline, creating downward pressure. However, fiscal stimulus and inflation trends could provide support, especially if geopolitical tensions escalate. Traders should be cautious and watch for firm signals on trade policy and renewable energy initiatives. If inflation picks up and the dollar weakens, expect a more bullish environment.
More information in our Economic Calendar.