- The price of silver jumps about 32.00 $ as the global commercial war has intensified.
- China, Mexico and China have announced retaliation tariffs for the USA.
- Moderate Fed bets have weighed over the US dollar and bond yields.
The price of silver (XAG/USD) trades 0.5% higher around $ 32.00 at the negotiation hours of North America on Tuesday. White metal exhibits strength as the commercial war between the United States (USA) and its American peers, and China has intensified.
Canada, Mexico and China have indicated retaliation tariffs on US imports on Monday, US president Donald Trump confirmed that 25% tariffs on Canada and Mexico, and 10% about China would enter into force as of Tuesday.
Earlier in the day, Canadian Prime Minister Justin Trudeau said that Canada will impose “retaliation tariffs on US imports” As of Tuesday “if US tariffs enter into force.” The Chinese economy also announced tariffs on a series of US agricultural imports in the American session on Tuesday, the president of Mexico, Claudia Sheinbaum Pardo, said that retaliation tariffs will arrive on Sunday since “Trump begins a global commercial fight.”
The increased geopolitical tensions scenario increases the attractiveness of safe refuge for precious metals, such as silver.
Meanwhile, the fall in the yields of the bonds and the US dollar (USD) have also strengthened the price of silver. The yields of the US Treasury bonds at 10 years fall about 4.14%. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, collapses about 106.00. The yields of US bonds and the dollar have faced sales pressure as operators have increased bets supporting the Federal Reserve (Fed) to cut interest rates at the June policy meeting.
According to the CME Fedwatch tool, the probability that the Central Bank cut interest rates in June has increased to 87% from 71% recorded a week ago.
Technical Analysis of La Plata
The price of silver moves up but struggles to extend its progress above the 20 -day exponential (EMA) mobile average, which quotes around $ 31.80.
The 14-day relative force (RSI) index falls within the range of 40.00-60.00, suggesting that the bullish impulse has vanished. However, the bullish inclination remains intact.
Looking down, the ascending trend line from the minimum of August 8, 26.45 will act as a key support for the price of silver around $ 30.00. Meanwhile, the maximum of February 14, 33.40 will be the key barrier.
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 assets 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.
