- The price of silver rises as the uncertainty continues around the US trade policy promotes the demand for safe refuge.
- A weaker US dollar is also supporting, making the metal called dollars more attractive to foreign buyers.
- President Trump has requested investigation into possible tariffs on all imports of critical minerals.
The price of silver (XAG/USD) is rising slightly after recent losses, quoting around $ 32.30 per Troy ounce during the Asian session on Wednesday. The increase is produced as persistent uncertainty about US commercial policy continues to feed the demand for safe refuge for precious metal.
An American dollar (USD) is also supporting silver prices, making the asset called dollars more attractive to foreign buyers. The dollar index (DXY), which measures the value of the dollar against a basket of six main currencies, is quoting down about 99.80 at the time of writing. Market attention is now focused on the next US retail sales data for March, which could shed light on the impact of tariff tensions on consumer spending.
The safe refuge flows to La Plata were even more reinforced after the US president Donald Trump requested investigation into possible tariffs to all imports of critical minerals. This movement indicates a more aggressive commercial position and increases the risk of tensions with key suppliers, including China. It also partially compensates for market optimism caused by recent exemptions in certain technological products and possible exclusions for car parts.
Meanwhile, the governor of the Federal Reserve, Christopher Waller, tried to calm the nerves of the market, saying that any inflation derived from tariffs would probably be temporary. Waller also reaffirmed the disposition of the Fed to lower interest rates if necessary, pointing out the central bank’s commitment to support growth. Investors now expect the US retail sales report and a speech by the president of the FED, Jerome Powell, later a day to obtain more direction on economic perspectives and monetary policy.
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.
