Silver Falls Below $65 as Its Demand Story Builds
Silver is having two opposite years at once. The price just fell below 65 dollars, down more than 40 percent from its January record, hammered by the strong dollar and the Fed. At the same time, the industrial demand that actually uses silver, from AI data centers to solar panels, keeps climbing. One metal, two stories.
Silver is unusual because it is both a precious metal and an industrial one. As a precious metal, it trades like gold, and it has been hit by the same force this week, a surging dollar and rising rate expectations that punish assets paying no yield. That is why silver dropped below 65, its lowest since mid-June, heading for a weekly loss of around 4.5 percent. The macro is brutal right now.
The other half of silver is the part the macro ignores. Roughly half of silver demand is industrial, and the fastest-growing piece is technology. AI data centers, EV electronics, and electronics broadly are pulling more silver than the market expected at the start of the year, picking up some of the slack as solar growth cools. Silver is now down about 42 percent from its January high of 121.62, as the physical demand underneath it keeps building.
The setup has a tell. The gold-silver ratio sits around 61.7, which by historical standards makes silver look modestly cheap relative to gold, a level that has often come before silver outperforms. For now the dollar is winning, and silver is following gold and crypto lower, since cash that earns interest looks more attractive than metal that does not. The fundamental and the macro are pulling in opposite directions.
Which force wins depends on the same thing as everything else this week: the dollar and the Fed. If inflation data softens and the dollar rolls over, silver has more upside than gold, because it gets both the precious-metal bounce and the industrial-demand tailwind. If the Fed stays hawkish, silver likely keeps underperforming, since it is more volatile and more economically sensitive than gold. The AI and energy demand story is real, but it is a multi-year driver, not a this-week one.
So silver is caught between a punishing macro and a strengthening real-world demand base. The dollar is pushing it down today, AI and solar are pulling it up over time, and the gap between the two is the opportunity and the risk. Down 42 percent from its high, with demand quietly rising. Watch the dollar, then watch the factories.
Silver Falls Below $65 as Its Demand Story Builds
Silver is having two opposite years at once. The price just fell below 65 dollars, down more than 40 percent from its January record, hammered by the strong dollar and the Fed. At the same time, the industrial demand that actually uses silver, from AI data centers to solar panels, keeps climbing.
