- The price of silver reaches a maximum of almost five months of $ 33.40, which was not seen since February 14.
- The demand for the shelter is strengthened in the midst of growing commercial tensions and fears of a possible recession in the US.
- The silver also gains impulse as the softest inflation data in the US feed the speculation that the Fed could make additional cuts of rates soon.
The price of silver (XAG/USD) continues its bullish impulse for third consecutive session, around $ 33.30 per Troy ounce during Thursday’s Asian negotiation hours. Precious metal benefits from the growing demand for safe refuge amid the growing commercial tensions and concerns about a possible recession in the United States (USA).
Commercial tensions intensified after US President Donald Trump imposed higher tariffs on steel and aluminum imports, increasing economic uncertainty and enhancing the attractiveness of silver as a safe refuge asset. Trump also described the economy as in a “transition period”, pointing out a possible deceleration. Investors interpreted their comments as an early warning of a possible economic turbulence in the future.
Non -remunerative commodities, including silver, gained traction as inflation in the US cooled more than anticipated in February, increasing the speculation that the Federal Reserve (Fed) could cut interest rates before expected.
The general monthly inflation in the US was slowed to 0.2% in February from 0.5% in January, while underlying inflation was reduced to 0.2%, below 0.3% forecast. In annual terms, general inflation decreased to 2.8% from 3.0%, while underlying inflation fell to 3.1% from 3.3%. Market participants now expect the US Price Price Index (IPP) of Thursday and the weekly applications for unemployment subsidy to obtain more economic clues.
In addition, the demand for silver called in dollars could increase as the US dollar (USD) remains under pressure due to the slowdown in inflation. A weaker dollar makes commodities more affordable for foreign buyers. At the time of writing, the dollar index (DXY), which measures the USD compared to six main currencies, remains stable around 103.50.
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.
