- Silver prices fall as reports suggest that China could reduce tariffs on certain US imports.
- It is reported that Beijing is considering a suspension of its 125% tariffs on certain American products.
- Silver could bounce if the Trump administration decides to reduce tariffs on Chinese imports.
The price of silver (XAG/USD) drops slightly after two days of profits, quoting around $ 33,40 per Troy ounce during the European hours on Friday. The attractiveness of the metal as a safe refuge is weakened as reports arise that China could lift tariffs on certain US imports.
According to Bloomberg, China is considering suspending its 125% tariffs on certain American products, including medical equipment, ethane and aircraft leasing. Sources indicate that Chinese officials are particularly focused on exempting tariffs for aircraft leases. However, neither the China Ministry of Finance nor the General Administration of Customs have made official statements.
The US dollar (USD) gains traction for optimism around commercial negotiations, making money called dollars less attractive to operators with foreign currencies. Reuters reported early progress in US commercial conversations with Asian key allies such as South Korea and Japan, further supporting the dollar.
Despite the recent fall, silver prices could recover if the US, under the Trump administration, decides to reduce tariffs on Chinese products, depending on the progress of possible negotiations. China has shown willingness to participate in the dialogue. Since silver is a crucial component in industries such as electronics, solar energy and automotive manufacturing, any improvement in commercial relations between the US and China could increase metal demand.
Michael Hart, president of the American Chamber of Commerce in China, welcomed the news that both countries are reviewing tariffs. Hart pointed out that, although discussions on exclusion lists for specific products categories are ongoing, official policies have not been published. Both the Ministry of Commerce of China and the US Department of Commerce are currently collecting opinions of interested parties.
FAQS SILVER
Silver is a highly negotiated precious metal among investors. Historically, it has been used as a value shelter and an exchange means. Although it is less popular than gold, operators can resort to silver to diversify their investment portfolio, for their intrinsic value or as a possible coverage during periods of high inflation. Investors can buy physical silver, in coins or bullion, or negotiate it through vehicles such as the funds quoted in the stock market, which follow their price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can cause the price of silver to shoot due to its safe refuge status, although to a lesser extent than that of gold. As an asset without performance, silver tends to climb with lower interest rates. Its movements also depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (XAG/USD). A strong dollar tends to maintain the price of silver at bay, while a weaker dollar probably drives rising prices. Other factors such as investment demand, mining – silver supply is much more abundant than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, particularly in sectors such as electronics or solar energy, since it has one of the highest electrical conductivities of all metals, surpassing copper and gold. An increase in demand can increase prices, while a decrease tends to reduce them. The dynamics in US economies, China and India can also contribute to price fluctuations: for the US and particularly China, its large industrial sectors use silver in several processes; In India, the demand for consumers for precious metal for jewelry also plays a key role in pricing.
Silver prices tend to follow gold movements. When gold prices go up, silver typically follows the same path, since their status as shelter is similar. The gold/silver ratio, which shows the number of ounces of silver necessary to match the value of an ounce of gold, can help determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that silver is undervalued, or that gold is overvalued. On the contrary, a low ratio could suggest that gold is undervalued in relation to silver.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
