- The price of silver falls marginally, but remains close to its maximum of several decades around 39.00.
- Commercial tensions between the EU and the US have strengthened the demand for shelter assets.
- The Fed is expected to maintain stable interest rates at the monetary policy meeting next week.
The price of silver (XAG/USD) drops slightly to about 38,80 $ during the early European session on Tuesday. Even so, white metal is close to its maximum of several decades around 39.00. The perspectives for white metal remain bullish due to the strong demand for shelter assets, since concerns about global commercial flow persist.
The growing commercial tensions between the United States (USA) and the European Union (EU) have raised commercial tensions worldwide, given the magnitude of business between both economies. EU officials are preparing for countermeasures to compensate for the impact of additional tariffs imposed by the US, while struggling to reach an agreement.
On Monday, Germany joined its European peers and pressed for a tougher position towards Washington, since US president Donald Trump demanded a higher base tariff rate to sign a commercial agreement. “If they want war, they will have war,” Bloomberg reported.
During the weekend, a report by the Wall Street Journal (WSJ) showed that President Trump is considering a higher base tariff rate in a range between 15% and 20% compared to the 10% mentioned above. The report also showed that Trump is not very interested in giving up 25% cars.
Theoretically, the increase in global commercial tensions increases the demand for shelter assets, such as silver.
Meanwhile, the growing expectations that the Federal Reserve (FED) maintain interest rates in the current range of 4.25% -4.50% longer have failed to affect the price of silver. The highest interest rates by the Fed for a longer time are unfavorable for assets without performance, such as silver.
Technical Analysis of La Plata
The price of silver operates widely stable near its maximum of several decades around 39.00. The 20 -day exponential (EMA) mobile average with up to rise about 37.40 $ suggests that the short -term trend is upward.
The 14-day relative force (RSI) index oscillates within the range of 60.00-80.00, indicating that the bullish impulse is intact.
Looking up, the psychological level of $ 40.00 will be a key barrier to the price of silver. Down, the maximum of June 18 about 37.30 will be a key support zone.
GRAPH DIARY OF LA PLATA
SILVER – FREQUENT QUESTIONS
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.
