The iShares Silver Trust (SLV), the largest silver-affiliated ETF, has been in the green for 6 out of the past 9 weeks. On Monday, it held steady above the crucial support zone of $28.00 to trade at $28.91 as at the time of writing.
Heightened safe haven demand, coupled with the positive outlook for the metal’s industrial use, are silver’s key bullish drivers. Indeed, these factors are behind the 40% surge recorded over a period of one year. Even so, concerns over US economic slowdown are curbing its gains.
Safe haven demand yields 40% silver price increase YoY
Precious metals are a conventional safe haven in times of economic and geopolitical uncertainties. In recent weeks, investors have been particularly alarmed by Trump’s tariff proposals and foreign policy.
Last week, the US President threatened to impose an additional 10% tariff on Chinese products. In response, China is considering some relevant countermeasures that target an array of US exports including agricultural products.
Notably, concerns over an escalation of the trade war between the top two economies has heightened the demand for safe haven assets including precious metals such as gold and silver. It is one of the key bullish factors that have seen SLV silver ETF record weekly gains in 6 out of the past 9 weeks. Similarly, the price has surged by about 40% since a similar period in 2024.
Industrial usage set to offer steady support to silver price
In addition to its status as a precious metal, silver is also an industrial metal. In fact, its price movements are largely influenced by the dynamics in the industrial space.
Despite concerns over slow economic growth in the US, investors are optimistic over the metal’s industrial demand. According to the latest Caixin manufacturing PMI figures, China’s manufacturing activity expanded at its fastest rate in three months. The presented figure of 50.8 exceeded analysts’ forecast of 50.4 as well as the prior month’s 50.1.
The return of workers after the Lunar Year holiday celebrations has contributed to the increased activity in China’s factories. Besides, US importers appear to front-run the enacted tariffs as they anticipate even higher duties.
What’s more, the heightened demand for electric vehicles (EVs) is a key bullish driver of silver price. According to Rho Motion, global sales of EVs is set to increase by at least 17% in 2025. With a typical 100kWh EV battery requiring about 1kg of silver, SLV silver ETF has the potential to hold steady above the crucial support zone of $27.35.
Concerns over slowing US economic growth curbs SLV silver ETF gains
While silver price continues to find support in its increased safe haven and industrial demand, concerns over the US economic slowdown have been curbing its gains. To start with, investors fear that Trump’s trade policies will be inflationary.
These concerns, coupled with lower consumer confidence, has pushed the benchmark 10-year Treasury yields to a fresh three-month low at 4.19%. Yields usually move inversely to bond prices. As such, the observed trend points to an increase in the demand for US government bonds.
While lower Treasury yields have led to the easing of the US dollar, making silver less expensive for buyers with foreign currencies, investors are focused on the probable economic slowdown.
In the ensuing sessions, crucial economic indicators including US job data and Fed Chair’s speech on Friday will be influential.
SLV ETF stock analysis
The daily chart shows that the SLV ETF stock peaked at $31.80 in November last year. It has moved to the 50-day and 25-day Exponential Moving Averages (EMA). Most notably, silver has formed a head and shoulders chart pattern. It has now moved slightly below the right shoulders part.
Therefore, the stock will likely have a bearish breakdown in the coming months, with the next point to watch being the neckline at $27. A drop below the neckline will point to more downside, with the next point to watch being at $26.2, the lowest swing in December.
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