Silver prices inched higher during Friday’s Asian trading session, recovering slightly after a more than 1% drop in the previous session. The precious metal was last seen trading around $33.10 per troy ounce, buoyed by a resurgence in safe-haven demand driven by fiscal uncertainty in the United States.
Investor sentiment toward manufacturing-sensitive commodities like silver has been shaken by concerns over the U.S. fiscal deficit. Despite the headwinds, market participants are turning to precious metals as a hedge against growing economic uncertainty, helping silver stabilize.
The move follows the narrow passage of President Donald Trump’s “One Big Beautiful Bill” in the U.S. House of Representatives, which now heads to the Senate. Approved by a single vote, the sweeping budget proposal includes tax breaks on tipped income and U.S.-made car loans. The Congressional Budget Office (CBO) estimates the bill will add $3.8 billion to the federal deficit.
Silver remains under pressure from mixed economic signals in the U.S., including lingering concerns over tariffs and slowing growth in sectors like photovoltaics. The metal is a critical component in various industrial products, from solar panels and electronics to automotive systems, making its price sensitive to global manufacturing trends.
Industrial demand for silver remains robust, particularly in China, which expanded its wind and solar capacity to nearly 1,500 gigawatts in the first quarter of 2025, thanks to a 60 GW surge in solar power. In Europe, solar output also jumped 30% year-over-year in the same period, further underlining the metal’s importance in the green energy transition.
Adding to the cautious outlook, Moody’s downgraded the U.S. credit rating from Aaa to Aa1, citing a projected rise in federal debt from 98% of GDP in 2023 to 134% by 2035. The downgrade reflects escalating debt-servicing costs, expanding entitlement programs, and declining tax revenues—all of which are expected to drive the budget deficit to nearly 9% of GDP.
While industrial headwinds persist, silver’s appeal as a safe-haven asset amid mounting fiscal risks may continue to support its price in the near term.
