The premise of rising U.S. interest rates impacting silver's safe-haven appeal in 2025 appears to be largely contradicted by market data and Federal Reserve actions this year. Throughout much of 2025, the Federal Reserve maintained interest rates at 4.25%-4.50% for several periods, with a notable shift towards expectations of rate cuts and even actual cuts occurring, rather than increases.1 For instance, the FOMC indicated expectations for two rate cuts in 2025, and a 25 basis point cut was implemented in September, bringing the federal funds rate to 4.00%-4.25%.2
Despite a stable-to-decreasing rate environment, silver, as tracked by the iShares Silver Trust (SLV), demonstrated strong performance and maintained its safe-haven characteristics:
- Strong Price Appreciation: Silver prices saw significant increases throughout 2025. The average price for Q1 2025 was $31.88/ounce, a 37% increase from Q1 2024.3 By Q3 2025, the average price rose to $39.38/ounce, representing a 33.9% increase over Q3 2024.4 The iShares Silver Trust's net asset value itself increased by 28.28% from December 31, 2024, to June 30, 2025, primarily driven by the rising price of silver.5
- Persistent Safe-Haven Demand: The rally in precious metals, including silver, was fueled by strong safe-haven demand in response to geopolitical uncertainties, potential trade wars, and alongside anticipations of U.S. interest rate cuts.6 Silver's historical correlation with gold, which also hit all-time highs due to safe-haven demand, suggests a similar driver for its performance.7
- Institutional Interest: Institutional ownership in SLV remains substantial, with over 1,100 institutional owners holding a significant volume of shares. Recent filings indicate a general increase in institutional shares held, suggesting continued confidence in the asset class.8
Therefore, rather than being negatively impacted by rising rates, silver's safe-haven appeal in 2025 appears to have been bolstered by a combination of geopolitical tensions, robust industrial demand, and the market's expectation of, and eventual realization of, interest rate cuts, which generally supports non-yielding assets.
To explore further, Fintel's platform offers detailed institutional ownership data for SLV, including 13F filings, and tools to track short interest and options flow for deeper insights into market sentiment.
