Silver Price Reaches New Multi-Month High
As of May 22, 2025, the silver price is quoted at about $33.59 per ounce, marking an increase of approximately 1.7% within 24 hours and a weekly gain of about 4.2%. This development marks a multi-month high for silver.
Impact of the US Credit Downgrade
The rise in silver prices is closely linked to the downgrade of US credit by Moody’s. This downgrade weighs on the US dollar, which in turn strengthens the demand for alternative investments like precious metals. Investors are increasingly seeking safe havens given the rising uncertainties in the US debt market and economic risks.
Undervaluation and Supply Deficit Support the Price
Fundamentally, silver is currently undervalued compared to gold, providing additional upside potential. The supply of silver remains tight: A fifth consecutive supply deficit is already expected for the year 2025 – cumulatively nearly 800 million ounces between 2021 and 2025, equivalent to one year’s production. This supply deficit supports prices in the long term.
Analysts predict a price range for the year 2025 between about $32 and over $40 per ounce, depending on how favorably economic conditions continue to affect precious metals. The current market situation with a weaker dollar as a result of the credit downgrade is likely to exert further pressure on the dollar in the short term, thus increasing the attractiveness of silver as an investment.
Implications for Investors
- Rising silver prices can serve as a hedge against currency risks.
- Market movements signal increased demand for safe assets.
- The fundamental supply deficit indicates a longer-term positive price development.
Overall, as of today, there is a clear trend towards a stronger positioning in precious metals like silver due to macroeconomic uncertainties surrounding the USA as well as a structurally tight supply in the silver market.