Silver is not only a safe haven for global investors, but above all a key component of modern industry.
When silver becomes too expensive for technology
Smartphones, computers, photovoltaic panels, data centers, AI chips, or advanced electronic systems in cars. Today’s technology simply does not exist without silver.
However, the amazing price rally of 2025, when the value of this metal rose by about 140%, triggered a painful demand destruction mechanism. The technology and automotive sectors, struggling with huge margin pressure, began to seek savings and cheaper material alternatives rapidly.
Analysts at Swiss bank UBS in a special note on May 22 point out bluntly that demand erosion will persist as long as raw material prices remain at current high levels.
Silver has a completely different market specification than gold. It does not have strategic anchoring in official central bank reserves, so it remains entirely exposed to the whims of private investors and cyclical industry cycles.
When the economy slows, silver is the first to be hit with a shotgun.
UBS experts add coldly that the current level of volatility does not compensate for risk, making this market extremely unattractive for speculative positions.
See also: Gold shot up to $5,200 (USD), silver rises 2.9%. Investors have forgotten the January crash. What next for precious metal prices?
A brief history of the disaster, i.e., a 30% crash
If you think only the cryptocurrency or gaming company markets can give an extreme rollercoaster, look at this year’s silver chart.
The absolute peak of madness occurred on January 28 of this year, when silver broke the 120 USD per ounce barrier, causing true euphoria on the exchange.
That joy did not last long, as the market experienced a powerful crash the same day, losing almost 30% of its value in just one trading day.
Since that painful moment, investors are still nursing wounds. Although the price has slightly rebounded from the 2023 low of 67,60 USD on March 20, it is still far from pre-Iran conflict levels.
In mid‑May silver reached a local peak of 87 USD, after which the market entered a consolidation phase in the 75‑78 USD range.
On Friday, May 29, silver price rises by a symbolic 0,21% to 75,52 USD per ounce.
Chart. Silver spot market price (XAG/USD)
Source: Trading Economics.
See also: Gold at 10,000 USD? “Only gold, silver, palladium, platinum are investments. The rest is speculation”
Geopolitical squeeze and golden shadow
Many market experts believe this is not the end of silver declines.
HSBC specialists outright state that silver remains fundamentally overvalued and its price relative to gold will eventually diverge. Even if gold records another bull run, the price ratio of the two metals will worsen significantly against silver.
At the same time, gold holds strong, reacting to reports of a preliminary agreement between the USA and Iran, extending the ceasefire for another 60 days.
Both silver and gold experienced a significant drop since the start of the Iran war, but current peace efforts make investors again see gold as a safe haven. Moreover, the price of gold is boosted by such central banks that buy gold in bulk.
Silver does not react as strongly to positive Middle East news, which only confirms that without a demand impulse coming straight from electronics factories, speculative capital alone is not enough to keep the metal’s level at peaks.
On Friday, gold price rises by 0,75% to 4528 USD per ounce.
Chart. Gold spot market price (XAU/USD)
Source: Trading Economics.
See also: Gold price fell 15%, silver still negative. Discount not seen since 1983
Source: CNBC, Bloomberg.
