Silver prices have risen to about $48.80 per troy ounce during Asian trading. This increase follows the decline of China’s RatingDog Manufacturing PMI, which dropped from 51.2 in September to 50.6 in October. Demand for silver has surged after US President Trump announced plans to limit China’s access to Nvidia’s advanced chips, raising tensions between the US and China. The weak PMI data from China has made investors more cautious, enhancing silver’s appeal as a safe investment. Silver is important in many industries, including electronics and solar panels, and China’s industrial demand remains significant, despite the recent PMI numbers. Traders are also waiting for the US ISM Manufacturing PMI data, which could influence market trends. The Chinese rating agency, RatingDog, reported a weaker-than-expected PMI for October, which was predicted to be 50.9. Additionally, the ongoing US government shutdown has introduced economic uncertainty, further making silver attractive to investors. Silver is a popular choice for those looking to diversify their portfolios or protect against inflation. Investors can buy silver physically or through investment options like Exchange Traded Funds (ETFs). The price of silver is affected by various factors, including geopolitical events, industrial demand, and its correlation with the US dollar and gold. Silver’s industrial use, particularly in electronics and solar energy, significantly impacts its price. With silver surpassing $48.80, we’re observing renewed interest in it as a safe haven due to multiple factors. The heightened US-China trade tensions over semiconductor access, alongside the extended government shutdown in the US, are creating market uncertainty. These conditions support assets like silver, driving prices toward the crucial level of $49.00. The slowing manufacturing data from China adds complexity to this situation. Although the RatingDog PMI reading of 50.6 was disappointing, the official NBS Manufacturing PMI for October 2025 also fell to 49.9, signaling a contraction for the first time since June. This combination of weakened industrial demand and growing global economic fears paradoxically supports silver’s position as a safe asset. In the US, the six-week government shutdown is starting to impact both the economy and the dollar. Recent reports from the Congressional Budget Office (CBO) estimated that the shutdown might reduce Q4 GDP growth by up to 0.2%. This has contributed to the US Dollar Index (DXY) dropping below the 103.50 support level. A weaker dollar generally makes dollar-priced commodities like silver more appealing to foreign buyers. Under these circumstances, we are witnessing a rise in volatility expectations, with options markets anticipating larger price fluctuations in the upcoming weeks. For example, the Cboe Silver Volatility Index has risen over 15% in just two sessions, reflecting traders’ strategies to hedge against or speculate on potential price increases. Many are considering call options expiring in December 2025 and January 2026 to capture this momentum. This situation resembles the market conditions of late 2019 when geopolitical trade tensions drove a significant rally in precious metals. The Gold/Silver ratio, which is currently around 75, remains historically high, indicating that silver could continue to outperform gold if this trend persists. We will closely monitor the upcoming US ISM Manufacturing PMI data for further insights.

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