- The price of silver rises slightly after registering losses of more than 0.50% in the previous session.
- The silver called dollars lost ground due to a stronger US dollar.
- The demand for safe refuge for silver can be strengthened in the midst of growing economic concerns in the US.
The price of silver (XAG/USD) recovers its recent losses recorded in the previous session, quoting around $ 33.30 per Troy ounce during Wednesday’s Asian hours. However, precious metals, including silver, faced selling pressure in the middle of a strengthened US dollar.
The silver called dollars lost its brightness since a higher US dollar is expensive for foreign buyers. The dollar received support after Japan insinuated possible cuts in the issuance of government debt, promoting global bond markets and exercising down pressure on US yields. At the time of writing, the yields at 10 and 30 years of the US Treasury bonds are 4.46% and 4.97%, respectively.
In addition, the demand for safe refuge for silver weakened due to the reduction of commercial tension between the United States (USA) and the European Union (EU). The president of the USA, Donald Trump, extended the deadline of tariffs on EU imports from June 1 to July 9. On Monday, Brussels agreed to accelerate commercial conversations with the United States to avoid a transatlantic commercial war.
However, safe refuge silver gains land due to the growing fears of the US economy amid increasing debt problems. The “One Big Beautiful Bill” of President Donald Trump is scheduled to be voted in the Senate. The bill is expected to increase the deficit at 3.8 billion dollars, since new provisions are added, including tax cuts, spending increases and the increase in debt roof. This could increase the risk that bond yields remain high and maintain high financing costs for consumers, companies and governments.
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.
