- The price of silver remains close to a maximum of $ 13.89, which was marked on Monday.
- Silver, safe refuge, can face difficulties amid the relaxation of commercial tensions between the US and China.
- The US and China officials reached possible resolutions, but are waiting for approval of their leaders.
The price of silver (XAG/USD) remains firm after registering more than 0.50% loss in the previous session, quoting around $ 36,60 per Troy ounce during Wednesday’s Asian hours. The price of the gray metal maintains a position near a maximum of 13 years of 36,89 $, which was reached on Monday. The US consumer price index (ICC) will be observed closely later in the North American session, with expectations of an increase of 2.5% year -on -year (yoy) in May.
However, precious metals, including silver, can face challenges due to the decrease in the demand for safe refuge amid the relaxation of commercial tensions between the United States (USA) and China. On Tuesday, US Secretary of Commerce, Howard Lutnick, indicated possible resolutions with China. Lutnick also said that both countries have reached a framework to implement the Geneva consensus.
The US negotiators also expect that problems related to the shipments of rare earth minerals and magnets will be resolved with the implementation of the framework. While the Vice Minister of Commerce of China, Li Chenggang, described communication with American and sincere counterparts, will report on a framework to Chinese leaders. The officials of both parties will seek the approval of their leaders before the implementation.
On Tuesday, in its semiannual report of global economic perspectives, the World Bank reduced its global growth forecast by 2025 in 0.4% to 2.3%, highlighting that higher tariffs and the greatest uncertainty represent a significant threat to almost all economies. The global lender cut his forecasts for almost 70% of all economies.
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.
