By Bas Kooijman, CEO and Asset Manager, DHF Capital S.A
Silver prices rose slightly on Tuesday, recouping some of Monday’s losses. Investors are looking ahead to key US inflation data, as monetary policy expectations currently lean toward more interest rate cuts. Over recent days, Fed Governor Michelle Bowman supported the dovish narrative, indicating that three cuts may be appropriate this year. Markets now widely price in a September cut; however, stronger inflation could weigh on silver prices.
While industrial demand may soften modestly in 2025, a rebound is expected next year, led by the photovoltaic and electronics sectors. Additionally, the global silver deficit is projected to widen in 2025, reinforcing the structural supply imbalance, although it could narrow in 2026. Retail and institutional demand remained resilient. ETP inflows reached 95 million ounces in H1, and total holdings now stand near 1.13 billion ounces. Despite weaker jewelry demand, physical investment is expected to rise, supporting the market.
Meanwhile, President Trump extended the US-China trade truce by another 90 days and prepares for a high-stakes meeting with President Putin, keeping geopolitical risks in focus. Positive developments in talks could weigh on silver prices as safe-haven demand could recede.