Gold's recent performance provides further insight into the precious metal's trend, with gold also testing a key technical level near its 50-day moving average. Gold and silver interactions often reflect broader sentiment across metals markets. Gold prices have recently been supported by safe-haven flows and a weaker dollar, with similar fundamentals strengthening that could benefit silver in the near term.
Supported by low yields and industrial demand
Analysts at UBS highlighted that lower US real yields and stronger global industrial production are expected to provide a favorable environment for silver in 2025. These factors are likely to stimulate demand and strengthen silver's dual role as both an industrial metal and a store of value. UBS expects silver to trade between $36 and $38 an ounce in 2025, reflecting confidence in a broad-based economic recovery and increased industrial activity.
Similarly, gold is supported by lower Treasury yields, reducing the opportunity cost of holding non-yielding assets such as precious metals. With the Fed signaling a cautious approach to rate cuts in 2025, yields continue to trend lower, which could also benefit silver.
Geopolitical uncertainty increases safe haven appeal
Geopolitical tensions are another factor supporting both silver and gold. Recent conflicts, such as Israel's airstrikes on Gaza and Russia's drone attack on Kiev, have increased uncertainty and increased demand for secure assets. During times of geopolitical stress, investors often focus on silver alongside gold, increasing the potential for further gains in the metal.
Analysts say market participants are also pricing in potential inflationary pressures from fiscal policy. Silver, like gold, is seen as a hedge against inflation, which could become even more relevant if global economic conditions shift towards higher prices and supply chain constraints.
