FX.co ★ Silver Climbs Toward 2011 Highs

Silver prices advanced towards $41 per ounce on Friday, maintaining levels not seen since 2011. This increase was largely driven by lower real yields and a weaker dollar, following unexpectedly poor US jobs data. These factors reignited speculation for multiple interest rate cuts by the Federal Reserve, decreasing the opportunity cost associated with holding non-yielding assets like silver. This macroeconomic trend coincided with a tight physical market. The demand for silver is increasing due to its industrial use in solar panels, electric vehicles, and electronics. However, supply remains restricted since silver is primarily a byproduct of base metal mining, and the rate of new primary output growth is slow. Projections suggest a significant structural deficit by 2025. On the industrial front, China's solar cell exports have surged by over 70% in the first half of the year, primarily driven by exports to India, further bolstering short-term physical demand.