- La Plata shoots after the accusations of US President Trump to China for violating his commercial agreement.
- The US dollar collapses while fears for tariffs weigh on the feeling, supporting the XAG/USD.
- Silver prices advance above the 10 -day SMA, rising more than 3% at the time of writing.
La Plata (XAG/USD) shines intensely on Monday, with prices that shoot in response to a weaker US dollar (USD). With the white precious metal quoting more than 3% higher in the day, prices have exceeded the simple mobile average (SMA) of 10 days, providing support in 33.28 $ at the time of writing.
The feeling of the market and the general mood deteriorated during the weekend, after US President Donald Trump accused China of violating the temporary trade agreement reached in Geneva on May 12.
In a publication in Truth Social, Trump declared that “China, perhaps not surprising some, has totally violated his agreement with us. So much for being Mr. Good boy!”
Although a context was provided, a Reuters article suggested that frustration seems to derive from China’s lack of progress to accelerate the development of its rare earth minerals.
According to a Reuters report on Friday, the main global automotive leaders are warning about an imminent shortage of rare earth magnets, which are obtained from China. These magnets are essential components in various automotive applications, including windshield wiper engines and anti -lock brake systems. This shortage could lead to the closure of car manufacturing plants in the near future.
On Thursday, the Treasury Secretary, Scott Besent, declared during an appearance in Fox News Channel that US trade negotiations with China were “a little stagnant” and that completing an agreement would probably require a direct commitment from both President Trump and the Chinese President Xi Jinping.
Renewed tensions and market nerves tend to increase the demand for safe shelters, such as gold and silver, while reducing the demand for risk -sensitive assets.
GRAPH DIARY OF LA PLATA
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.
