- Silver price soars to near $34.50 due to growing uncertainty over US elections and escalating Middle East tensions.
- PBoC’s larger-than-expected interest rate cut has improved Silver’s demand as a metal.
- The US Dollar refreshes an 11-week high on expectations of moderate interest rate cuts from the Fed.
Silver price (XAG/USD) surges to near $34.50 in Tuesday’s North American session, the highest level seen in over 12 years. The white metal strengthened after Israel launched missiles at Hezbollah’s financial institutions situated in the southern Lebanese cities of Tyre and Nabatiyeh. Escalating tensions in the Middle East region has improved Silver’s appeal as a safe haven.
In the United States (US) economy, growing uncertainty over presidential elections, which are just two weeks away has also strengthened the Silver price appeal. Latest national polls have shown that competition between former US President Donald Trump and current Vice President Kamala Harris is very stiff. Market experts worry that Trump’s victory could undermine the currencies of the US’s trading partners. Trump promised to raise tariffs and lower taxes if he wins elections.
The demand outlook of the Silver as metal has improved after the People’s Bank of China’s policy announcement on Monday in which the central bank reduced one-year and five-year Loan Prime Rate (LPR) by larger-than-expected size of 25 basis points (bps). Silver as a metal has applications in various industries such as Electric Vehicles (EV), wires and cables, and mining etc. The PBoC cuts its key borrowing rates with an outsize margin to boost households’ consumption and spending on infrastructure and to revive the housing sector.
Meanwhile, the US Dollar (USD) posts a fresh 11-week high as investors expect the Federal Reserve (Fed) to reduce interest rates gradually. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, climbs above 104.00.
Silver technical analysis
Silver price strengthens after a breakout above the horizontal resistance plotted from May 21 high of $32.50 on a daily timeframe. Upward-sloping 20- and 50-day Exponential Moving Averages (EMAs) near $30.70 and $31.70, respectively, signals more upside ahead.
The 14-day Relative Strength Index (RSI) oscillates above 60.00, points to an active bullish momentum.
Silver daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD keeps bullish vibe, first upside target emerges near 1.1400
EUR/USD holds steady near 1.1360 in Monday’s Asian session. The positive view of the pair prevails above the key 100-day EMA with the bullish RSI indicator. The Greenback steadies as traders are confused by mixed signals on US-China trade relations.
GBP/USD consolidates around 1.3300 mark; downside potential seems limited
GBP/USD lacks any firm intraday direction and oscillates in a range at the start of a new week. The USD preserves last week’s recovery gains from a multi-year low and acts as a headwind. Bets for a less dovish BoE and hopes for a UK-US trade deal to limit the downside for the major.
Gold price languishes below $3,300; last week’s swing low holds the key for bulls
Gold price meets with a fresh supply on Monday amid the US-China trade deal optimism. A fall in China’s gold consumption and a modest USD uptick also weigh on the commodity. Trade-related uncertainties and Fed rate cut bets warrant caution for the XAU/USD bears.
Bitcoin and Ethereum stabilize while Ripple shows strength
Bitcoin and Ethereum prices are stabilizing at around $93,500 and $1,770 at the time of writing on Monday, following a rally of over 10% and 12% the previous week. Ripple price also rallied 8.3% and closed above its key resistance level last week, indicating an uptrend ahead.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.