Silver Rates Hit Lowest Since November 2025: Why AI Fears Are Hurting Silver Prices More Than Fed Rate Hikes?

Investors are bearish on overall bullion market, but the sell-offs in silver are rather brutal. For instance, spot gold has crashed nearly 6% on a month-on-month basis, but spot silver has nosedived at a faster pace by 15% over the period. Geopolitical risks in West Asia, which should have made haven assets attractive, have done exactly the opposite. The new fear of aggressive rate hikes has taken a mighty toll on precious metals. But for silver, the case is rather peculiar. The white metal is currently trading at its lowest level since November 2025, and the reason is artificial intelligence.

Spot Silver Crashes Harder Than Gold

Spot silver has been rundown by bears stubbornly this week. On October 23, 2026, spot silver tank below $54 per ounce mark, hitting its lowest level since November 2025.

On month-on-month basis, spot gold crashed 5.94%, and spot silver nosedived harder by 14.83% so far.

The reason? Deepening of selloffs in technology and artificial intelligence stocks. Mega tech companies like Meta, SpaceX and Tesla have declared their earnings, and all three have raised their capital expenditure, reportedly targeted towards AI spending.

For instance, Meta raises its 2026 CAPEX to $135-145 billion, with aim to aggressively investing in both core businesses and emerging AI initiatives. Tesla also doubled their capital spending to $4.7 billion in the latest quarter. Meanwhile, SpaceX's AI investment has become one of the biggest individual spending programmes in the AI infrastructure boom, to the tune of $16.4 billion in Q3 2026.

So far this year, Amazon, Microsoft, Alphabet and Meta are planning to invest $720-745 billion combined towards AI infrastructure.

Amidst the aggressive AI spending, concerns have reignited that mega tech players will likely require additional debt for funding AI buildouts.

Why silver price are more vulnerable to AI currently?

Where gold is more safe-haven and purely monetary asset, silver is both a precious metal and an industry commodity -- and they both react differently to the same news.

Probably the first few thoughts when talking about AI would be related to software and technology. However, AI requires physical hardware for its existence.

AI relies on a vast ecosystem of technology and chips, from powerful processors and memory to networking equipment, power-management systems, cooling solutions and massive data centres. As AI continues to grow, these systems must handle ever-increasing amounts of electricity and data while managing the intense heat generated by high-performance computing.

Silver has all the components for such an environment that AI needs.

In fact, as per Golden Star Insight Team, silver has the highest electrical conductivity of any metal and also has excellent thermal conductivity. That combination has made silver useful in electronics long before the current AI boom.

The World Silver Survey of 2026 explains silver has long been a pillar of technological progress. In the data-driven era of hyper-scale data centers, its unmatched conductivity and thermal performance are being leveraged in new and critical ways - from the chips that process data to the grids that power them, the satellites that transmit it, and even the neural interfaces that link human cognition with machines.

In simple words, silver is essential in chip packaging, connectors and power modules, managing extreme thermal loads and high-frequency signals.

With global computing demand projected to grow rapidly through 2030, silver's role here will become ever more critical. The World Silver Survey 2026 expects that silver offtake from data centers alone is expected to exceed 10% of electrical and electronics demand next year.

Increasing demand for AI spending is not the negative factor for silver per. If anything, its a positive case.

However, the bearish mechanism in silver is due to concerns about returns, financing and potential growth of AI in the future, is triggering a broader selloff.

Forced Liquidation Not Necessary Means Silver Is Less Attractive

During the time of selloffs in technology stocks or other assets, funds may look to sell silver to generate cash, not necessary because the fundamentals of this precious metal in the long term is weak. They sell silver to meet redemptions, cover losses and reduce portfolio risks.

Large Spending, Prices Pressure

US Federal Reserve's chair, Kevin Warsh during IMF Bangkok speech said, AI will improve productivity and expand US economy's ability for goods and services in the future years. However, heavy investment in AI is creating near-term price pressures.

The reason is large and rapid investment in AI could lead to increase in demand for financing, and if inflation remains stubbornly high, bond yields and US dollar could rise, which may make non-yielding assets like silver less attractive.

In September 2026 FOMC minutes, Fed said, AI-related investments would likely contribute to stronger gains in productivity and potential output in the coming years but they noted that there was substantial uncertainty over the magnitude or timing of the effects.

Some Fed officials even flagged emerging concerns regarding potential repercussions associated with rapid adoption of AI, including cybersecurity and other risks, that could act as a drag on productivity in some cases.

If AI Investment Disappoints, Industrial Demand Falls

The current concern in AI is the unclear clarity of its potential growth. Hence, if a large-spending in AI did not generate adequate returns, markets would expect weaker economic growth and lower demand for industrial metals. Because silver is both precious metal and an industrial input, it is directly vulnerable to the scenario.

What About Fed Rate Hike?

Generally, market often predicts rate hike, rate cut or status quo before the actual day of the policy. So in most cases, market has already factored the impact on precious metals. Hence, during the day of the announcement, they do little damage to silver prices.

But a surprise hawkish remark on October 28, 2026, could push dollar and treasury yields higher, hurting silver in the process. Fed is expected to declare its bi-monthly monetary policy next week, and market is predicting a status quo from Fed and a 25 basis hike in December policy.

Where is silver headed? As per Ponmudi R, CEO of Enrich Money, Silver is now down about 9.3% since 9 October against gold's 3.4%, and the gold-silver ratio has risen from 69 to 73. A global equity sell-off and firmer rate expectations are the drag, while silver's industrial-demand link amplifies growth worries compared with gold. The bias remains negative, with a sustained move above $55.00 needed to stabilize prices. A decisive break below the $53.50-$54.00 support zone could open the way for a further decline toward $52.00.

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