- Silver price extends its upside to near $31.00 amid a sell-off in the US Dollar.
- The Greenback faces pressure as Trump has announced lower tariffs on China than expected.
- The Fed is expected to keep interest rates steady in the next three policy meetings.
Silver price (XAG/USD) reclaims a more-than-a-month high of $30.95 in Wednesday’s European session. The white metal strengthens as the US Dollar (USD) extends its downside due to less-fearful tariff plans announced by United States (US) President Donald Trump in his first two days of administration.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, refreshes a two-week low at 107.80. The lower US Dollar makes the Silver price inexpensive for investors. 10-year US Treasury yields tick lower to near 4.57%.
Trump has announced 25% tariffs on Mexico and Canada and is discussing 10% tariffs on China from February 1. However, his comments during the election campaign indicated that the tariffs would be much higher than what he actually announced.
Lower tariffs by Trump would also weigh on market speculation that the Federal Reserve (Fed) will keep interest rates at their current levels for longer. Market participants were anticipating that higher tariffs would increase demand for domestically produced goods and services. This scenario would have accelerated inflationary pressures.
Currently, the CME FedWatch tool shows that traders are confident that the Fed will keep its key borrowing rates in the range of 4.25%-4.50% in the coming three policy meetings.
Silver technical analysis
Silver price gathers strength to return above the north-side sloping trendline near $30.85, which is plotted from the 29 February 2024 low of $22.30 on a daily timeframe.
The white metal discovered strong buying interest near the 200-day Exponential Moving Average (EMA), around $29.45, and has now extended its upside above the 20-day EMA, which is around $30.26. This suggests that the overall trend has turned bullish.
The 14-day Relative Strength Index (RSI) rises to near 60.00. A fresh bullish momentum would trigger if it manages to break above 60.00.
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
AUD/USD trades better bid but remains below 0.6300
AUD/USD defends bids but remains below the 0.6300 mark in the Asian session on Friday even as risk sentiment improves and the US Dollar bounces on US-Canada trade optimism and US government shutdown aversion news. However, US tariff uncertainty continues to limit the risk-sensitive Aussie.
USD/JPY holds gains above 148.00 as US Treasury bond yields recover
USD/JPY stays firm above 148.00 in the Asian session on Friday, yet the upside appears capped by the divergent BoJ-Fed expectations. The pair capitalizes on a recovery in the US Dollar and the US Treasury bond yields as risk tone improves on US government shutdown aversion.
Gold price sits near the all-time high; $3,000 in sight
Gold consolidates its record high rally, remaining near $3,000 early Friday. Rising trade tensions underpin the safe-haven bullion. Fed rate-cut expectations also render Gold positive but buyers turn cautious amid a renewed uptick in the US Dollar and the US Treasury bond yields.
Stablecoin regulatory bill receives green light during Banking Committee hearing
The US Senate Banking Committee voted on Thursday to advance the Guiding and Establishing National Innovation for US Stablecoins Act, which aims to establish proper regulations for stablecoin payments in the country.
Brexit revisited: Why closer UK-EU ties won’t lessen Britain’s squeezed public finances
The UK government desperately needs higher economic growth as it grapples with spending cuts and potential tax rises later this year. A reset of UK-EU economic ties would help, and sweeping changes are becoming more likely.
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.