Silver Has Plummeted. Should You Buy the Dip?

Core Viewpoint - The price of silver has experienced significant volatility, dropping nearly 33% from its all-time high in January 2025, but recent fundamentals suggest a potential for recovery and investment opportunities in silver [1][2][3]. Price Movement - Silver's price surged from approximately $31 per ounce in January 2025 to $115 per ounce in January of the current year, before falling back to $77 between January 20 and February 5 [1]. - Recently, silver's price has rebounded to above $80 per ounce, although it remains significantly lower than its recent highs [3]. Market Analysis - Analysts attribute the recent price drop to a stronger dollar, reduced demand at high price levels, and concerns regarding the AI boom that previously supported prices [2]. - Speculative buying in China has contributed to increased volatility in silver prices, which are generally more unstable than gold due to a smaller market [2]. Future Outlook - A weaker dollar and anticipated lower interest rates are expected to support a potential silver rally [4]. - Futures traders are predicting at least two more interest rate cuts by the Federal Reserve this year, which could further benefit precious metals [5]. - The demand for silver is also linked to the AI sector, particularly due to its necessity in the construction of data centers, with hyperscalers projected to spend at least $625 billion on AI infrastructure this year [6]. Investment Vehicle - For those looking to invest in silver, the iShares Silver Trust (NYSEMKT: SLV) is recommended, as it represents physical silver holdings with net assets of approximately $51 billion [7].