The weekly chart indicates the market has a clean shot at $34.59 to $34.87. However, it needs a catalyst to get there.
Political Turmoil and Fed Pressure Drive Demand for Hard Assets
Markets were rattled early in the week when former President Trump openly attacked Fed Chair Jerome Powell, labeling him a “major loser” and demanding aggressive rate cuts. This stoked fears over central bank independence, sparking a 2.4% selloff in equities and adding momentum to precious metals. Although Trump later reassured markets he had no plans to remove Powell, the damage to investor confidence had already been done, helping silver sustain its upward move even as gold cooled.
Gold-to-Silver Ratio Signals Strong Upside Potential
One of the standout signals for silver’s bullish case is the gold-to-silver ratio, which soared past 105 this week—an extreme not seen since the early COVID-19 panic. Historically, ratios above 100 have preceded major upside moves in silver as the market works to correct the imbalance. Analysts note that after the last peak, silver outperformed gold three-to-one. With the long-term average closer to 60, silver’s deep discount is attracting value-focused buyers looking for catch-up potential.
Easing Trade Tensions Brighten Silver’s Industrial Demand Outlook
Trade war concerns that initially weighed on silver’s industrial demand outlook began easing mid-week. Trump dialed back tough tariff rhetoric, and Treasury Secretary Scott Bessent indicated the current tariffs were not sustainable. Progress was seen Friday as China granted limited tariff exemptions on U.S. goods, hinting at possible broader negotiations. A de-escalation would support industrial demand for silver, particularly in technology and renewable energy sectors.
Tight Supply Bolsters Long-Term Bullish Thesis
Adding to silver’s appeal is a tightening physical market. The Silver Institute projects a global deficit of 117 million ounces next year, marking the fifth consecutive annual shortfall. Persistent supply-demand imbalances, fueled by green energy investments, are providing fundamental support under prices. Inventory drawdowns are expected to continue, creating a firm base even during periods of market volatility.
Outlook: Silver Positioned for Continued Strength
Looking ahead, silver’s setup remains constructive. The extreme gold-to-silver ratio, easing trade tensions, dollar weakness, and ongoing supply deficits all point to further upside. Traders should watch for continued dollar softness and any Fed-related news to gauge short-term momentum. Silver’s mix of monetary and industrial appeal, along with its relative undervaluation to gold, offers a strong risk-reward profile into next week.
