Silver prices have risen to about $63.75 during the Asian trading session. This increase is fueled by a growing industrial demand and silver’s inclusion on the US critical minerals list. The price is also lifted by a weaker US Dollar and the possibility of future tariffs. Demand for silver is climbing from sectors such as solar energy, electric vehicles, and artificial intelligence, with expectations for significant growth by 2030. Silver’s listing as a critical mineral in the US hints at potential tariffs that could limit its global availability, further enhancing long-term demand. Recently, the US Federal Reserve cut interest rates by 25 basis points. This action weakened the Dollar, making silver more attractive to non-US investors. There is a 78% chance the Fed will maintain current interest rates next month, which could also increase silver’s appeal. Investors often choose silver for its intrinsic value and as a safeguard during inflation. They typically trade it in physical forms or via Exchange Traded Funds (ETFs). Many factors affect silver prices, including geopolitical tensions, interest rates, and the performance of the US Dollar. Its industrial demand, especially in electronics and solar energy, can sway prices as it closely follows gold trends due to their shared safe-haven status. With silver trading around $63.75, we could see a retest of the all-time high of $65.50 reached in May 2025. Current market activity looks strong, indicating that bullish positions could be favorable in the upcoming weeks. Traders should consider any small price dips as potential buying opportunities, thanks to the supportive economic factors. The long-term demand for silver is becoming more robust, positioning it as more than just a precious metal investment. The US listing silver as a critical mineral is a key development that tightens global supply, as American warehouses fill up with inventory. Additionally, a reported 15% growth in demand from the solar panel industry in 2025 provides strong price support. Monetary policy also benefits silver. The Federal Reserve’s recent rate cut to a 3.50-3.75% range is the second reduction in this easing cycle started in October 2025. A weaker dollar makes silver more affordable for investors holding other currencies, further enhancing its attractiveness. In this environment, buying call options with strike prices above the $65.50 high could be an effective strategy to capitalize on a breakout. However, keep in mind that rising implied volatility makes options pricier. Using bull call spreads can be a cost-effective approach to express a bullish outlook while managing risk. Silver is also outperforming gold, as the Gold/Silver ratio has decreased from over 85:1 early in 2025 to around 70:1 now. This trend indicates that pairs trading—going long on silver futures while shorting gold futures—could be a profitable strategy. This position would benefit from silver’s continued strength, driven by its unique demand in industrial applications.

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