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Recession Risk and Trade Policy Driving Defensive Positioning
Corporate CFO sentiment continues to sour, with 60% now expecting a U.S. recession in the back half of the year, up sharply from 7% last quarter. Trade policy uncertainty—driven by renewed tariff threats from former President Trump—has taken center stage. The unpredictability has already curbed capital expenditures and dulled risk appetite, reinforcing the appeal of defensive assets like silver and gold.
Equities remain under pressure, with 90% of CFOs predicting the Dow will retest 40,000 before making any progress higher. This bearish equity outlook has coincided with rising demand for metals as portfolio hedges, particularly as inflation concerns and geopolitical tensions continue to cloud visibility.
Silver Still Undervalued vs. Gold
While gold has broken to all-time highs above $3,040, silver’s relative performance remains subdued. The gold-to-silver ratio is still above 90—far above its historical norm—underscoring how undervalued silver remains in relative terms. Traders are beginning to rotate into silver on this disconnect, especially as physical demand stays robust and ETF inflows begin to pick up.
Industrial Demand and Supply Crunch Add Long-Term Support
Silver’s dual role as both a monetary and industrial metal strengthens its case in this environment. Demand from solar, EVs, and other green technologies remains firm. Meanwhile, the market is on track for a fifth straight global supply deficit in 2025. The structural shortage has some analysts calling for a longer-term move above $40, with aggressive forecasts pointing to $75–$100 on a supply squeeze.
Market Outlook: Bullish Bias with Key Levels in Focus
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