Silver headwinds have begun to blow, as new data on US growth indicates an economic downturn. Silver is still up by 11% YTD but is down 6.62% from the 2025 peak of $34. Silver price is down by 4.5% over the last 1-month and currently trades at just under $33. The silver price today in India is Rs 95,780 per kg.
Why are silver prices not surging as much as gold? Gold is up 40% while silver has gained 22% over the last one-year.
A weaker-than-expected US GDP report for Q1 2025 has fueled renewed recession fears. The ongoing trade tensions are also contributing to uncertainty in the economic environment.
Silver’s industrial consumption is being impacted by global recession fears, causing it to struggle below $33 an ounce, down by 1.5% from the previous day’s rate.
Silver thrives in a rising economy with increased industrial activity. In the first quarter, the U.S. economy contracted by 0.3%, falling short of forecasts for 0.3% growth. Ahead of anticipated tariff hikes by the Trump administration, US businesses and consumers hoarded products, resulting in a more than 40% increase in imports in the first quarter.
The US job market also appears to be slowing down. The ADP National Employment Report showed private payrolls rose by just 62,000 in April, well below forecasts of 115,000 and the weakest gain since July 2024.
Global economic slowdown is also looking real as China’s manufacturing activity contracted more than expected in April, pointing to softer industrial demand.
BMO Capital Markets predicts the solar power sector will continue to dominate the solar market due to growing global demand for affordable renewable energy. BMO predicts a 5.5% increase in solar sector silver consumption, reaching 246 million ounces in 2026, with peak demand at 261 million ounces. This year, 203 million ounces will be consumed in the jewelry sector, and investment demand is 234 million ounces.
In 2025, silver demand is expected to exceed supply, with a projected 1.20 billion ounces demand, while global supply remains at 1.05 billion.
‘World Silver Survey 2025’ by The Silver Institute reveals that silver’s failure to launch is primarily due to macro and geopolitical factors favoring gold’s widely accepted quasi-monetary properties.
Compared to gold, silver looks cheap at current prices. The Gold:Silver ratio is currently at 100:1, much above the long-term average of 70:1. This indicates silver has more space to move up and close the gap with the gold prices.
The only silver lining for the silver price is any formal announcement of trade negotiations between the United States and China, signaling a de-escalation in the two superpowers’ trade war.
Also Read: Gold-to-silver ratio signals a bullish outlook for silver as gold retreats from all-time high level
