Silver Holds Steady on Rate-Cut Speculation

Silver prices remained relatively stable on Tuesday, mirroring movements in the gold market amid a temporary pause in recent volatility. Trading just above $33.00 an ounce, silver hovered within last week's range, supported by broader calm across precious metals following gold’s surge to a record high above $3,500 on April 22.

Market sentiment has slightly improved with indications that tensions between the U.S. and China may ease, although concerns over global trade policies linger. The sharp divergence between gold and silver has continued, with the gold-to-silver ratio climbing well past 100—significantly higher than the historical 80–90 range seen over the past few years. While gold benefits from safe-haven demand during economic uncertainty, silver’s dual role as an industrial metal limits its momentum.

Investors are closely watching key economic indicators due later this week, including Q1 GDP figures from both the U.S. and Eurozone, the U.S. core PCE price index, ISM manufacturing PMI, and April’s non-farm payroll data. These releases may help shape expectations around upcoming Federal Reserve decisions, particularly the June meeting, where markets are pricing in a 65% chance of a 25-basis-point rate cut.

On Monday, silver gained over 1%, rebounding from support between $31.45 and $32.19, boosted by gold’s strength and a weaker dollar following underwhelming U.S. GDP results. However, traders remain cautious as silver continues to lag behind gold, largely driven by intensified central bank demand for gold and macroeconomic concerns.

Technically, silver faces resistance around the 50-day moving average near $32.60. A decisive move above this level could open the path to test the recent high of $33.70. Still, unless there’s a pickup in ETF inflows or industrial demand, silver may remain rangebound, especially as gold continues to dominate investor interest.

According to Goldman Sachs, structural shifts in global demand are driving a wedge between gold and silver. Gold’s appeal as a reserve asset has intensified, particularly among central banks, while silver’s volatility and industrial reliance weigh on its relative value. The bank projects gold to reach $3,700 by year-end and possibly $4,500 in bullish scenarios, driven by ongoing ETF inflows and central bank purchases. In contrast, silver’s outlook remains subdued unless a new catalyst emerges. For now, gold retains the upper hand in the battle of the metals.