Silver prices staged a significant rally during Friday's trading session, with the spot price for immediate delivery surging more than 4% to break through the $82 per ounce level. The precious metal settled at $82.0605, representing a gain of 4.53% from Thursday's close of $78.502. Throughout the session, silver traded between $77.4985 and $82.5165, demonstrating substantial volatility as market participants digested multiple economic developments.
Economic and Policy Catalysts Drive Safe-Haven Demand
The sharp move in silver followed two key market-moving events: a weaker-than-expected U.S. economic growth report and a landmark Supreme Court decision. The Court struck down sweeping tariffs previously implemented by the Trump administration, removing what traders viewed as a significant source of uncertainty for international trade. Meanwhile, economic data showed the U.S. economy grew at an annualized rate of just 1.4% in the fourth quarter, while December's Personal Consumption Expenditures (PCE) inflation reading rose 0.4%.
Market analysts noted that these developments prompted renewed interest in precious metals as a hedge against uncertainty. "The ruling removes uncertainty on most of the Trump tariffs," commented Tai Wong, an independent metals trader. Bob Haberkorn of RJO Futures highlighted the "unknowns and uncertainties" driving investors toward safe-haven assets. The broader precious metals complex also advanced, with gold rising 1% to $5,047.10 per ounce, while platinum and palladium posted gains as well.
Currency and Rate Expectations Shift
Currency markets reflected the changing landscape, with the U.S. dollar index falling 0.22% to 97.68. According to CME FedWatch data, which derives probabilities from federal funds futures, market pricing for at least a 25-basis-point Federal Reserve rate cut in June slipped to 53.6% from 58.6% just a day earlier. Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull, observed that the "sell America" trade had "gotten a little ahead of itself," with investors also monitoring escalating tensions between the U.S. and Iran.
The rally in physical silver translated directly to the most popular silver exchange-traded fund. Shares of the iShares Silver Trust (SLV) climbed approximately 5% to $74.66, compared to a prior close of $71.01. The ETF, which seeks to track the daily performance of silver bullion, traded between $72.26 and $74.93 during the session.
Industrial Demand Faces Substitution Pressure
Away from macroeconomic factors, industrial demand dynamics are becoming increasingly complex. Industry experts report that solar panel manufacturers are accelerating efforts to replace silver with copper in their production processes. This shift comes as silver has rallied approximately 130% over the past year, putting significant pressure on manufacturing margins. "Silver is the greatest contributor to the increased cost of manufacturing solar panels," explained Derek Schnee of JK Renewables.
Marius Mordal Bakke of Rystad Energy noted that "broader industry shifts are expected this year" as companies seek cost alternatives. The solar sector represents a substantial portion of silver demand, with silver paste accounting for about 30% of total solar cell costs. The photovoltaic industry consumes approximately 196 million troy ounces annually, representing 17% of total global silver demand.
Interest Rate Outlook Remains Pivotal
The Federal Reserve's interest rate policy continues to represent a critical factor for silver's trajectory. Minutes from the Fed's January 27–28 meeting indicated that inflation "remains somewhat elevated" and uncertainty "remains elevated." The central bank maintained its policy rate in the 3.5% to 3.75% range, with market-based expectations pointing to one or two 25-basis-point cuts this year.
If inflation proves stickier than anticipated and rate cuts are delayed, higher yields and a stronger U.S. dollar could exert downward pressure on silver, which offers no interest payments to holders. This dynamic creates a delicate balance for the metal, which responds sensitively to both safe-haven flows and opportunity cost considerations.
Market Context and Forward Outlook
Earlier in the trading session, silver traded at $80.46 per ounce at 8:30 a.m. ET, representing a $2.40 gain from 24 hours earlier according to Fortune. The same report noted the metal's year-on-year gain exceeds $47 per ounce, highlighting the substantial rally that has occurred over the past twelve months.
Market participants now turn their attention to the Federal Reserve's upcoming March 17–18 policy meeting, which will include an updated Summary of Economic Projections. For the immediate future, traders will closely monitor U.S. interest rate expectations and dollar movements in the wake of the tariff ruling, with silver likely to remain highly reactive to each new economic headline and policy development.
