The U.S. dollar surged yesterday on two events that brought down European currencies. Reports that the European Central Bank is planning to wind down its quantitative easing program led to a weaker euro, and the pound was hurt by Theresa May’s announced plans to begin executing Britain’s exodus from the European Union by the end of March 2017.

Brexit woes caused a severe market disruption at the end of June, contributing to strength in safe havens like gold. However, silver has seen even greater demand, helping the iShares Silver Trust (SLV) and the ETFS Physical Silver (SIVR) fund see over a 28% year-to-date gain.

Some of the year’s gains were lost yesterday due to a resurgence in the U.S. dollar, but renewed strength in silver markets across Europe and Asia have helped the metal see a slight rise. Both SLV and SIVR saw a small rise in pre-market trading, and are set to recover from the three-month low both funds struck yesterday.

Both SLV and SIVR fell over 5% on Tuesday, leading to a one-month decline of 8%. The funds are about 14% off their 52-week highs.

However, silver funds have not yet reached their 52-week low and remain far above the middle of their one-year price range. At $17.48 trading by the end of the trading day on Tuesday, SIVR remained 30% above its 52-week low, which it reached in December 2015.

A key to silver’s future value will be the Federal Reserve’s policy on interest rates. The Fed’s federal funds rate target rose by 25 basis points in December last year, and the Fed has since delayed raising interest rates throughout 2016. At the beginning of the year, the Fed said it expected two rate hikes in 2016, but market turmoil and macroeconomic risks have caused the central bank to reconsider. Currently, market participants see a low probability of a rate hike in 2016.

A rise in interest rates would cause a stronger U.S. dollar, which in turn could lower demand for gold and silver. The debate on interest rates will likely continue to play out in metal markets, including silver.

Silver is also likely to see its price impacted by a deficit in physical silver relative to demands. According to the Silver Institute’s World Silver Survey 2016, silver saw a 4,038 ton deficit in 2015, a 60% increase from the prior year. Lower production and higher demand is likely to remain a determining factor in silver’s price point relative to the changing value of the U.S. dollar.

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