On January 22, 2025, silver prices recorded a slight increase in the international market, reaching approximately $31.23 per ounce, up 0.3% compared to the previous trading session. Domestically, silver prices followed the global trend, though the market remains subdued with low liquidity due to the U.S. holiday season. So, what has driven the rise in silver prices in this context?
Trends in Silver Prices in International and Domestic Markets
In the international market, spot silver prices edged up to $31.23 per ounce, reflecting a growing demand for safe-haven assets amidst complex geopolitical tensions. In Vietnam, silver prices adjusted in a similar direction but without significant breakthroughs. Market liquidity remains low, influenced by the U.S. holiday season, leading to a sharp decline in trading volumes.
Factors Affecting the Silver Market
Economic Factors:
Inflation in the U.S. shows signs of easing, suggesting that the Federal Reserve (Fed) might maintain stable interest rates in the near future. This reduces pressure on the U.S. dollar, supporting precious metals like silver.Weakening USD:
The decline in the U.S. dollar’s value increases the attractiveness of precious metals, including silver. As the dollar weakens, silver becomes cheaper for investors using other currencies, driving global demand.Geopolitical Tensions:
Ongoing geopolitical tensions in several regions around the world continue to drive investors toward silver and other safe-haven assets.However, despite these supportive factors, silver prices remain constrained by several challenges:
Market Sentiment:
Many investors are adopting a wait-and-see approach ahead of the Fed's upcoming policy meeting, which may provide further signals on monetary policy. This uncertainty limits major transactions in the silver market.Competition with Gold:
Gold prices have recently surged and captured greater attention from investors. As the leading safe-haven asset, gold is often prioritized over silver during periods of market volatility, leading to a relative decline in silver demand.
Forecasts and Recommendations
If constraints such as market sentiment and competition with gold are alleviated, silver prices could see a stronger rally in the coming weeks. Notably, positive signals from the Fed’s meeting could provide further momentum to the silver market.
For investors, closely monitoring developments from the Fed, U.S. economic data, and global geopolitical situations is crucial to making informed trading decisions. In the current environment, silver remains a potential long-term investment, especially as demand for safe-haven assets increases.
