Silver Demand from Solar Sector Slows Amid Rising Prices

The recent surge in silver prices has led to a decrease in demand for the precious metal from the solar industry. According to estimates, 19% less silver will be used in the production of solar modules this year compared to last year, marking the second consecutive year of decline. The solar industry's share of total silver demand is projected to fall to 14%, down from 18% last year.

The reduction in silver usage can be attributed to a decrease in the use of silver in silicon solar cells, which are expected to witness a further 17% decline this year. This drop is likely due to the sharp rise in silver prices that reached a record high of $120/oz at the end of January, prompting user industries to seek cheaper substitutes.

In contrast, gold has gained traction as a safe-haven asset, with its price climbing back close to $4,300 after the possible opening of the Strait of Hormuz. Analysts believe that expectations of US interest rate hikes are somewhat exaggerated and that the timing could prove too early if further difficulties arise in the Persian Gulf peace negotiation process.