Silver prices rose on Tuesday, reaching $58.82 per troy ounce, up 1.18% from Monday’s $58.13. Since the beginning of the year, silver prices have skyrocketed by 103.57%. The Gold/Silver ratio decreased to 71.55 on Tuesday from 72.11 the previous day. Silver is seen as a safe-haven asset, trading similarly to gold but on a smaller scale. It serves as a store of value and can protect against high inflation. Buyers can choose between physical silver or investing through platforms like Exchange Traded Funds (ETFs). Various factors can cause silver prices to change, including geopolitical events and economic trends. As a non-yielding asset, silver benefits from lower interest rates. The strength of the US Dollar also affects its price, as silver is priced in dollars (XAG/USD). Industrial demand is crucial for silver’s value, especially in the electronics and solar energy sectors. Major countries like the US, China, and India influence demand significantly due to their industrial needs and consumer behaviors. Silver prices often follow gold’s trends, with the Gold/Silver ratio providing insights into their relative values. Silver’s price has more than doubled in 2025, now sitting at $58.82, leading to high implied volatility in the options market. This makes buying straightforward call or put options very costly. Traders might want to use vertical or calendar spreads to manage risk and handle expensive premiums. This price surge has accelerated due to the Federal Reserve’s interest rate cuts, which began in late 2024 and included three cuts in 2025. This dovish approach has weakened the US Dollar Index from a high of 106 in 2024 to about 98 now, making silver cheaper for foreign buyers. It’s important to keep an eye on central bank communications for any changes in this supportive policy. Supporting this rally is a jump in industrial demand, now accounting for over 50% of total silver use. The International Energy Agency noted that global solar panel capacity increased by 75% in 2024, a trend that has continued into 2025. This strong demand gives a solid foundation for silver prices, making it more than just a speculative surge. The Gold/Silver ratio has now dropped to 71.55, down from over 85 in early 2024. This indicates silver is outperforming gold, driven by its industrial use and its monetary role. The ratio could continue to fall towards its historical average of about 60, suggesting silver may have more potential to rise compared to gold.

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