- The price of silver loses land to about 36.10 $ in Wednesday’s Asian session.
- The employment offers in the US show an unexpected increase in May, reaching 7.76 million.
- The high global uncertainty and geopolitical risks could limit the fall of silver.
The price of silver (XAG/USD) drops to around 36.10 $ during Wednesday’s Asian negotiation hours, pressed by a modest rebound in the US dollar (USD). The operators will take more clues from the publication of the US employment change report for June, which will be published later on Wednesday.
The dollar receives support from a better increase than expected in the demand for the labor market. This, in turn, exerts some selling pressure on the price of the raw material called in USD, since a stronger USD makes silver more expensive for foreign buyers.
The data published on Tuesday showed that Jolts employment offers in the US increased to 7.76 million in May, compared to 7,395 million offers reported in April. This figure exceeded the expectation of the market of 7.3 million.
On the other hand, the increase in geopolitical tensions and the high economic uncertainty could boost safe refuges, benefiting the price of silver. American officials said Iran was prepared to undermine the Ormuz Strait last month after Israeli attacks, but the mines were never deployed. The president of the United States, Donald Trump, declared that the US “will be there” unless they will give up his nuclear program.
In addition, the increase in demand for industrial uses could contribute to the rise in silver. According to the Institute of La Plata, it is estimated that the global silver demand will reach a new record in 2025, led by industrial use in photovoltaic and electronics, as well as a recovery in jewelry and silver items.
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.
