Silver Slumps as China's Industrial Shift Deepens Market Uncertainty

Silver traded at below $31 per ounce on Tuesday, September 9, 2025, marking a decline from its one-month high of $32 per ounce recorded in the previous session. The drop in silver prices has further widened the gap between its performance and that of gold, as uncertainty surrounding industrial demand, particularly from China, continues to weigh on the market. China's willingness to devalue the yuan in response to U.S. tariff threats has reinforced expectations of looser monetary policy, which is generally bearish for precious metals. Additionally, overcapacity in China’s solar panel industry has led to the implementation of a government self-discipline program among photovoltaic companies, potentially curbing silver demand for industrial applications [1].

Despite the recent dip, silver has still appreciated by 28.21%, or $6.70 per troy ounce, since the beginning of 2024, according to trading data on contracts for difference (CFDs) that track the benchmark market for the metal. This reflects the broader trend of increased investor interest in silver as a hedge against inflation and currency devaluation. Historically, the price of silver hit an all-time high of $49.51 per troy ounce in April 2011, but it has yet to recover to that level [1].

The spot price of silver is determined primarily by the near-term futures contract on the COMEX, the leading exchange for gold and silver trading. Prices are quoted in U.S. dollars and are recalculated continuously throughout the trading day across multiple exchanges, including New York, Chicago, London, Zurich, and China Hong Kong. While the spot price represents the value of one troy ounce of .999 fine silver, actual trading and investment products are priced with a premium added by dealers or financial institutions. This premium accounts for operational costs and profit margins, meaning retail investors typically pay more than the published spot price [3].

Looking ahead, analysts and global macro models predict that silver will trade at $32.15 per troy ounce by the end of the current quarter. A year from now, the estimated price is projected to rise further to $34.69 per troy ounce. These forecasts reflect ongoing expectations of monetary policy easing from major central banks, including the Federal Reserve, which is expected to announce a 25 basis points rate cut in the coming week, following similar cuts from the European Central Bank, the Bank of Canada, and the Swiss National Bank [1].

Investors considering silver as part of their portfolio have several options, including physical bullion in the form of coins, bars, and rounds, as well as paper-based investments such as ETFs and certificates. The gold-to-silver ratio, a commonly referenced metric, has also been a point of discussion among traders, as it helps assess relative value between the two metals. However, silver’s volatility remains a key consideration for investors, especially given its exposure to both global economic conditions and currency movements [3].

Source:

[1] Silver - Price - Chart - Historical Data - News (https://tradingeconomics.com/commodity/silver)

[2] Silver Price (https://goldprice.org/silver-price.html)

[3] Silver Price Today - Live Silver Spot Price Charts (https://www.jmbullion.com/charts/silver-prices/)