The price of silver is around $48.90, not far from its recent high of $49.55. Its demand as a safe investment has decreased after a peace agreement between Israel and Hamas eased geopolitical tensions. The Federal Open Market Committee indicates that more interest rate cuts could happen this year. Markets estimate a 92.5% chance of a rate cut in October and a 78% chance for December. The US government has been in a shutdown for nine days, stopping the release of economic data and potentially leading to job losses in the public sector. Private reports show a drop in ADP payrolls and ISM PMI job indices, which affects economic stability. Silver is a valuable investment, even if it’s not as widely popular. It serves as a store of value, especially during times of inflation. Various factors can influence its price, including geopolitical issues, interest rates, and changes in the value of the US Dollar. Silver’s industrial use in electronics and renewable energy also affects its price. The price of silver often moves with gold, and the gold/silver ratio can shift their perceived values. As silver has pulled back from its peak of $49.55, this could present a good moment for bullish investments. The decrease in safe-haven demand, due to news of a possible peace plan, seems temporary compared to more significant market influences. This dip might be an opportunity before the market takes into account stronger bullish factors. The Federal Reserve’s cautious approach is a key driver for higher silver prices. Recent meeting minutes hint strongly at more rate cuts, with markets pricing in a 92.5% probability of a cut this month. As interest rates decline, holding non-yielding silver becomes more attractive. We saw a similar pattern during the 2019 rate-cutting cycle that led to a major silver rally. Moreover, the ongoing US government shutdown, now nine days in, is creating uncertainty and affecting the US Dollar. Historically, such situations have been good for precious metals. During the 35-day shutdown from 2018 to 2019, silver prices rose over 8% as the dollar weakened. We expect this ongoing situation to benefit silver in the coming weeks. It’s also important to consider strong industrial demand, which supports silver prices. Recent reports from the Silver Institute indicate that global industrial usage is expected to grow by 12% in 2025, thanks to increased solar panel installations and the growth of 5G technology. This robust demand helps stabilize prices against short-term investor sentiment changes. Finally, examining the Gold/Silver ratio gives us more reasons to be optimistic. With gold priced near $4,000 and silver around $49, the ratio is about 81, well above the 21st-century average of around 65. This suggests that silver is currently undervalued compared to gold and has plenty of room to rise.

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