Silver Prices Slip Over 3% From Recent 13-Year High, But Analysts Say Solar And Industrial Demand Still Support Bull Case
Synopsis
JPMorgan’s Greg Shearer told The Wall Street Journal that solar-related silver demand may slow later this year after being pulled forward ahead of expected trade and energy policy changes in the U.S.
Silver prices continued to retreat on Friday, falling more than 1% in morning trade, pressured by a firm U.S. dollar. Silver was currently trading at $35.91, 3.7% below its 13-year high of $37.31, seen earlier this month.
Although the U.S. Dollar Index (DXY) was flat early Friday, it is up nearly 0.5% for the week. Silver is down 1.1% over the same period. The iShares Silver Trust (SLV) was down 1.3% Friday morning, and ProShares UltraShort Silver (AGQ) dipped 2.8%.
The recent rally in silver prices to a 13-year high was driven by both geopolitical tensions, including the ongoing conflict between Iran and Israel in the Middle East, and resilient demand from industrial sectors.
Unlike gold, which is primarily used as a store of value, most of the grey metal’s demand comes from manufacturers.
Industrial demand, especially from electronics, cutlery, and solar panel production, has remained steady, said Michael Widmer, Bank of America’s head of metals research, as told to The Wall Street Journal (WSJ).
The iShares Silver Trust, a popular ETF among retail investors that holds physical silver, has added nearly 11 million ounces to its reserves this year to meet rising demand, according to fund documents cited by the publication.
However, JPMorgan’s head of metals research, Greg Shearer, warned that demand from solar manufacturers, particularly in China, may have been pulled forward due to anticipated trade restrictions and shifting U.S. energy policy under President Donald Trump. There is a risk of a slowdown in the second half of the year, he told The WSJ.
Prices of silver have gained more than 24% this year and 20% in the last 12 months.
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