- The price of silver loses impulse around 33,80 $ in the Asian session on Monday.
- Safe refuge flows and growing industrial demand could continue to support the price of silver.
- The operators will take more signs of the US Retail Sales Report, which will be published later on Monday.
The price of silver (XAG/USD) slides to around $ 33,80 after reaching its highest level since October 31, 2024, during the Asian negotiation hours on Monday. However, the downward potential for white metal seems limited due to economic uncertainty about the impact of a global commercial war and a weaker dollar.
The growing commercial war between the US and many of its main business partners have generated concerns about the impact on economies around the world. This, in turn, could boost safe refuge assets such as silver. Last week, US President Donald Trump threatened a 200% tariff on any alcohol that reaches the US from the European Union (EU). Trump has also increased taxes on Chinese imports to the US to at least 20%.
In addition, supply deficits and growing industrial demand could act as strong tail winds for white metal. According to the Global Wisdomtree investment firm, investors maintain a significant portion of this and expect the highest prices to promote sales. Industrial silver demand has reached record levels, due to its use in photovoltaic applications, 5G technology and automotive electronics.
Silver operators will be attentive to the US retail sales report for February, which is expected to grow 0.7% monthly. In case of a stronger result than expected, this could raise the US dollar (USD) and weigh on the price of the raw material called in the USD in the short term.
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.
