- The price of silver faces pressure amid a feeling of global risk in improvement after Trump’s announcement about exemptions in technological products of “reciprocal” tariffs.
- Trump simultaneously initiated an investigation into possible tariffs to critical minerals, intensifying commercial tensions with China.
- The demand for safe shelter for silver is supported by continuous uncertainty around US commercial policy.
La Plata (XAG/USD) is quoted around $ 32.30 per Troy ounce during the Asian session on Thursday, cutting some of its earnings from the previous day. The precious metal is under pressure as the feeling of global risk improves after the announcement of the US president, Donald Trump, on exemptions for key technological products of the new “reciprocal” tariffs.
Exemptions, which cover smartphones, computers, semiconductors, solar cells and flat panel screens, mainly benefit products manufactured in China. However, the fall of La Plata remains limited since Trump simultaneously launched an investigation into possible tariffs to critical minerals, even more commercially climbing commercial tensions with China. The investigation also extends to sectors such as copper, pharmaceutical products, wood and semiconductors, highlighting the limited national production capacity of the United States in these areas.
The demand for safe refuge for silver is also backed by the persistent uncertainty about US commercial policy, together with a moderate demand of the US dollar (USD) and treasure values. The US dollar index (DXY) remains around 99.50, while the yields of 2 -year and 10 years of treasure bonds are 3.80% and 4.30%, respectively.
Meanwhile, moderate signals of the main central banks continue to support assets without performance such as the ingot. The softer inflation than expected in the US, Canada, the United Kingdom, India and the Eurozone in March – together with the possible cutting of the PBOC rates this quarter – even more the case in favor of precious metals.
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.
