- The price of silver is pressed as the decrease in commercial tensions between the US and China erodes the attractiveness of secure metal refuge.
- China’s movement to exempt certain US imports from its 125% tariffs have fed optimism about the improvement of bilateral relations.
- La Plata, called in dollars, faces winds against additional as a stronger US dollar weighs on prices.
The price of silver (XAG/USD) continues to lose ground for the second consecutive day, around $ 32.80 per Troy ounce during Monday’s Asian negotiation hours. The precious metal faces pressure as improved commercial relations between the United States (USA) and China decrease its attractiveness as a safe refuge.
On Friday, reports indicated that China had exempted certain imports from the US of its high tariffs of 125%, which increased the hopes that the prolonged commercial dispute between the two largest economies in the world could be close to a resolution. In addition, the US Secretary of Agriculture, Brooke Rollins, said Sunday, according to Reuters, that the Trump administration is maintaining daily discussions with China on tariffs.
However, contradictory signals persist. Reuters quoted a spokesman for the Chinese embassy on Friday, who firmly denied any ongoing negotiation, stating: “China and the US are not having any consultation or negotiation on tariffs.” The spokesman also urged Washington to “stop creating confusion.” In addition, a Beijing official reiterated on Thursday that there are no “ongoing economic and commercial negotiations and emphasized that the US must” completely cancel all unilateral tariff measures “to reopen the conversations.
Meanwhile, the US dollar (USD) was strengthened, weighing even more about raw materials called dollars like silver. The American dollar index (DXY), which tracks the USD in front of a basket of six main currencies, rose for the second consecutive session, quoting about 99.70 at the time of writing. The Federal Reserve (FED) remains in a period of silence before its meeting of the Federal Open Market Committee (FOMC) of May 7.
Looking ahead, operators are focused on several important US economic releases this week, including the preliminary GDP report of the first quarter, the inflation figures of the PCE of March and April employment data. These indicators could provide critical clues about the next Fed policy movements and the broader economic perspective.
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.
