- The price of silver rises to about $ 36.35 in the early Asian session on Thursday.
- Trump’s attacks threaten the credibility of the Fed, weighing on the US dollar.
- The increase in demand for industrial uses supports the price of silver.
The price of silver (XAG/USD) attracts some buyers to around 36.35 $ during the early European session on Thursday, backed by a weaker US dollar (USD). The operators will take more clues of the final growth of the GDP of the first trimester of the US and the FED statements later on Thursday.
The dollar faces some sale pressure due to concerns about the future independence of the US Federal Reserve (Fed). This, in turn, provides some support to the price of commodities called in USD, since a weaker USD makes money cheaper for foreign buyers. The president of the United States, Donald Trump, said he is selecting the replacement of the president of the FED, Jerome Powell, for September or October.
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 electronic, as well as a recovery in jewelry and silver items.
The markets have discounted the possibility of a rate cut at the next FED meeting in July in 25%, compared to 12% of a week ago, and have discounted 64 basic points (PBS) of reductions for the end of the year, compared to around 46 PBS last week, according to Reuters. The operators will take more clues of the US GDP data later on Thursday. Any surprise up to economic data could raise the US dollar and undermine the price of short -term silver.
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.
