- The price of silver rose since the last tariff threat of US President Donald Trump increased the demand for shelter assets.
- President Trump also plans to introduce pharmaceutical tariffs in the next two weeks.
- It is widely expected that the Federal Reserve maintain interest rates without changes on Wednesday.
The price of silver (XAG/USD) extends its profits per second consecutive session, quoting around 33.10 per Troy ounce during the Asian hours on Tuesday. The prices of precious metals, including silver, rose as President Donald Trump’s new tariff threat stimulated the demand for shelter assets.
President Trump announced plans to instruct the US trade representative and the Commerce Department to begin imposing a 100% tariff on the films produced abroad. On Monday, he also stated that he intends to introduce pharmaceutical tariffs in the next two weeks.
The Alcista silver potential called dollars could be restricted since an higher US dollar (USD) could make the precious metal cheaper for buyers with foreign currencies. The dollar is strengthening before the Federal Reserve monetary policy announcement (FED) on Wednesday.
While it is widely expected that the Fed maintains the interest rates unchanged, the markets are closely observing the comments of President Jerome Powell, particularly amid the uncertainty related to tariffs and the growing pressure of President Donald Trump for rate cuts.
On the commercial front, Treasury Secretary Scott Besent declared on Monday that the US is “very close to some agreements”, repeating Trump weekend comments that suggest advances in commercial negotiations. However, Trump ruled out a meeting with Chinese President Xi Jinping this week. The China Ministry of Commerce said Friday that it is reviewing an US proposal to resume conversations.
Plata FAQs
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.
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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.
