Silver prices dropped on Friday to $91.50 per troy ounce, down 0.51% from Thursday’s $91.97. Since the beginning of the year, silver prices have increased by 28.72%. The Gold/Silver ratio, which shows how many ounces of silver are needed to equal the value of one ounce of gold, rose to 50.33 from 50.08 the day before. Silver’s value can fluctuate due to factors like global events and economic changes.

Industrial Demand

Silver is widely used in industries such as electronics and solar energy due to its excellent electrical conductivity. An increase in industrial demand can raise prices, while a decrease can lower them. Silver prices often follow gold trends since both are considered safe-haven assets. The Gold/Silver ratio helps evaluate the relative value of both metals. A higher ratio may indicate that silver is undervalued compared to gold. Today’s small drop to $91.50 should be seen as a pause rather than a full reversal. Silver has surged 28% since the start of last year, so some profit-taking was expected. The key question is whether the key factors that boosted prices in 2025 are still present. One major reason for the surge in 2025 was record industrial demand. The green energy movement led to a rise in solar panel production, with reports showing global demand for silver in photovoltaic applications increased by about 30% last year. Traders should keep an eye on manufacturing PMIs and news related to the solar industry for signs of any slowdown.

Market Signals

The current Gold/Silver ratio of 50.33 is noteworthy. Historically, this ratio has been in the 60s or 70s, indicating that silver is currently outperforming gold significantly. This could suggest that silver is at full value now, and any change in market sentiment might lead gold to catch up, pushing the ratio higher and potentially negatively impacting silver prices. As traders, our attention in the upcoming weeks should focus on monetary policy and the US Dollar. We remember how a weaker dollar helped silver’s rise in 2025, but recent strong economic data has created uncertainty about what the Federal Reserve will do next. If the Fed takes a more aggressive approach to fight inflation, a stronger dollar could end silver’s recent gains. Thus, this slight price drop should serve as a caution to avoid complacency. We may see increased volatility around upcoming inflation releases and central bank announcements. In this environment, it might be wise to hedge long positions or consider buying put options to protect against potential corrections from these high levels. Create your live VT Markets account and start trading now.

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