On Tuesday (December 24th) during the US trading session, silver prices remained stable in light holiday trading, as investors turned their attention to the Fed's interest rate outlook for 2025 and potential policy changes under the leadership of President elect Trump. 24th) during the US trading session, silver prices remained stable in light holiday trading, as investors turned their attention to the Fed's interest rate outlook for 2025 and potential policy changes under the leadership of President elect Trump. The low liquidity environment continues to shape the current sideways trend.

Strong performance in 2024 lays the foundation for upward momentum

Silver prices rose by 24.65% in 2024, the best year since 2010. Analysts believe that the situation in 2025 may repeat itself, driven by the central bank's continued asset purchases and geopolitical uncertainty. However, with optimism surrounding Trump's return to the White House driving the US dollar stronger, the upward momentum is expected to begin to weaken in November.

Trump's policy shift or restriction on silver price increase

As Trump takes office in January next year, the market is preparing for increased tariffs, deregulation, and tax reform. These policies may exacerbate inflation and reduce the likelihood of the Federal Reserve continuing to cut interest rates significantly.

Although the Federal Reserve lowered interest rates in September, November, and December 2024, it stated that the rate cuts for 2025 would be relatively small due to ongoing inflationary pressures. The rise in interest rates has reduced the attractiveness of non income assets such as silver, which may limit their further appreciation.

China's stimulus plan drives industrial demand

It is reported that China will announce to issue US $411 billion of treasury bond in 2025, which marks that China is vigorously promoting economic recovery. The stimulus plan for infrastructure and advanced manufacturing is expected to boost demand for industrial metals, including silver. The market has responded positively to this.

The performance of silver in early 2025 will largely depend on the interaction between Federal Reserve policies and China's economic expansion. The escalating tariffs may prompt investors to consider silver as a safe haven asset. However, rising yields and a strong US dollar may offset this demand.

The industrial consumption driven by China's stimulus plan provides a bullish tone, implying that silver prices may trade between $26-34 unless unexpected geopolitical events change the outlook. Traders should remain vigilant about tariff movements and Federal Reserve announcements, which may affect price trends.