- The price of silver weakens as global commercial uncertainty decreases, after US trade agreements with its main commercial partners.
- Operators reduce bets in favor of interest rate cuts by the Fed at the September meeting.
- The US economy is expected to have added 110,000 new workers in July.
The price of silver has dropped 0.5% to about 36.50 $ during the European negotiation session on Friday. The white metal faces sales pressure as the confirmation of tariff agreements by the United States (USA) with several of its main commercial partners, such as Japan, the European Union (EU), South Korea and others, and the increase in the confidence of investors in which Washington will reach an agreement with China have decreased the demand for safe refuge assets, such as silver.
Safe refuge assets served strongly since the announcement of tariff policy by the US president, Donald Trump, which aimed to reduce the broad fiscal deficit of the nation. The demand for these assets increased as investors worried that the protectionist policy could lead to a harmful global commercial war.
Theoretically, increased global economic tensions improve the demand for safe refuge assets.
Meanwhile, a strong American dollar rally (USD) has also weighed over the price of silver. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, is firmly negotiated about a new maximum of two months around 100.00.
Technically, a stronger US dollar makes the price of silver a expensive bet for investors.
The US dollar has been strengthened as operators reduce bets in favor of interest rate cuts by the Federal Reserve (Fed) at the September meeting due to an optimistic Gross Domestic Product (GDP) of the second quarter, a report of inflation of personal consumption expenses (PCE) for June, and signs of President Jerome Powell that there is no hurry for targets of interest.
The highest interest rates by the Fed are unfavorable for assets that do not generate performance, such as silver.
In Friday’s session, investors will focus on the US non -agricultural payroll data (NFP) for July, which will be published at 12:30 GMT.
Technical Analysis of La Plata
The price of silver is negotiated around 36.20, the lowest level seen in almost two weeks. The short -term white metal trend is bassist since it is negotiated below the exponential (EMA) mobile average of 20 days around 37.60 $.
The 14 -day relative force (RSI) index slides about 40.00. A new bearish impulse would arise if the RSI breaks below that level.
Looking down, the minimum of June 24, 35.28 will act as a key support for the main one. On the positive side, the maximum of June 30 about $ 38,25 will be a critical obstacle to the pair.
GRAPH DIARY OF LA PLATA
SILVER – FREQUENT QUESTIONS
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.
