According to Peter Krauth, author of "The Silver Bull Market," silver prices are expected to rise significantly during the interest rate cut cycle, and the construction of artificial intelligence may become the next major driving factor for silver demand.

He stated that the impact of the Federal Reserve's interest rate cutting cycle on silver prices cannot be underestimated, and historical data provides strong support for this.

Krauth said, "I conducted an analysis to see how silver prices would react once the Federal Reserve starts cutting interest rates. Typically, at the beginning of a rate cut, silver prices may first fall for a period of time, but then hit bottom and rebound, starting to rise sharply. In the past three cycles of rate cuts, if you look from the lowest point to the highest point, silver prices have risen by an average of 332%

He added, "This process takes about one to two years, but it's still a very huge return. I'm not making it up, you can look at these numbers, that's how the silver price performs

Krauth believes that if the US economy enters a recession (which many experts predict may occur in the first half of 2025), silver prices will also have a strong performance.

He said, "Incrementum has done some good research, dividing multiple historical recessions into five stages: pre recession, early recession, mid recession, late recession, and post recession. In these stages, silver prices outperformed gold both before and after the recession

Krauth further explained that after the recession ends, the US Treasury Department will find ways to address economic difficulties by stimulating economic growth, and silver intensive investments in technology and infrastructure will be preferred.

He said, "In order to drive fiscal spending, they need to do things that are attractive to voters, and infrastructure is usually the most attractive because people believe that everyone will benefit from infrastructure investment. We have witnessed this situation in the recovery after the big financial crisis, and it is also the case after the pandemic. I think we will see this situation in the next recession. This is very beneficial for green transformation, such as improvements in electric vehicles, solar energy, wind energy, and even electric vehicle charging stations and solid-state batteries

Krauth said, "Silver is crucial in these technologies, which is why I believe we may have underestimated its performance in future downturns

Looking ahead, Krauth believes that artificial intelligence may become the next major driver of silver demand, and this is closely related to the solar energy industry.

Krauth said, "Artificial intelligence is a driving factor for silver demand in two aspects. Firstly, in terms of technology, these microchips require silver to work effectively. Secondly, in terms of storage, as storage requires energy to run data centers, artificial intelligence indirectly drives the demand for silver

He said, "By 2025, the amount of data generated globally will be 50% more than all the data from 2010 to 2016 combined. This growth is astonishing, and artificial intelligence is driving this change. The energy consumption of a chat GPT query is 10 times that of a Google search, so we need a lot of energy

Krauth also mentioned that while large data companies such as Microsoft, Google, and Meta plan to use nuclear energy to power their data centers, other businesses will need to look for scalable and affordable alternative energy sources. And solar energy, especially solar panels containing silver, will become the next best choice.

He said, "For companies that also require a large amount of electricity to drive data centers, I think solar energy will be an obvious choice. Of course, solar energy requires a larger land area to build solar facilities, but compared to nuclear energy, its licensing approval speed is faster, power transmission is relatively easy, and it can be almost self-sufficient. If you have land to build data centers and enough space to build solar facilities, you can actually rely entirely on yourself

Krauth concluded that the close integration of solar facilities with data centers can effectively avoid dependence on external power supply.

Daily chart of spot silver