Investor interest in silver wanes amid growing downside risks to industrial demand

On Monday, silver prices partially recovered after dropping to an eight-week low on Friday. However, market pressure persists amid growing concerns over global demand, particularly in industrial sectors, following the latest round of trade tariffs imposed by US President Donald Trump.

Unlike gold, silver is heavily dependent on industrial demand—sectors like electronics, solar energy, and others account for over 50% of global consumption. In 2024, total demand reached 700.2 million ounces.

Following the tariff announcement on Wednesday, the metal's price plunged nearly 9%, dropping to $31 per ounce. By contrast, gold, benefiting from increased demand for safe-havens, soared to a record of $3,167. As a result, the gold-to-silver ratio surged to 100, the highest since June 2020, highlighting silver's severe underperformance.

Trade and tariff risks continue to be the primary source of market uncertainty. Nevertheless, inflows into silver ETFs and sustained investor interest may provide temporary support to prices.

Market participants await this week's inflation data release, which could determine the Federal Reserve's monetary policy trajectory and consequently impact precious metals prices.

From a technical point of view, silver prices have broken out of their upward corrective trend on the daily chart (D1). Fluctuations near the breached trendline indicate that it is now acting as resistance. The MACD (default parameters) confirms the downtrend, as it’s showing divergence and the histogram is moving into the negative zone.

Signal:

The short-term outlook for silver suggests selling. 

The target is at the level of 26.500.

Part of the profit should be taken near the level of 28.800.

A Stop loss could be placed at the level of 32.550.

The bearish trend is short-term, so a trading volume should not exceed 2% of your balance.