Silver Price Forecast: XAG/USD moves below $32.50 due to easing trade concerns
- Silver price faces pressure amid improving global risk sentiment following Trump’s announcement of exemptions on technology products from “reciprocal” tariffs.
- Trump simultaneously initiated a probe into potential tariffs on critical minerals, intensifying trade tensions with China.
- Safe-haven demand for Silver is supported by ongoing uncertainty surrounding US trade policy.
Silver (XAG/USD) is trading around $32.30 per troy ounce during Thursday’s Asian session, paring some of its gains from the previous day. The precious metal is under pressure as global risk sentiment improves following US President Donald Trump's announcement of exemptions for key technology products from newly proposed “reciprocal” tariffs.
The exemptions, which cover smartphones, computers, semiconductors, solar cells, and flat-panel displays, primarily benefit goods manufactured in China. However, Silver’s downside remains limited as Trump simultaneously launched a probe into potential tariffs on critical minerals, further escalating trade tensions with China. The investigation also extends to sectors like copper, pharmaceuticals, lumber, and semiconductors, highlighting the US's limited domestic production capacity in these areas.
Safe-haven demand for Silver is also underpinned by persistent uncertainty around US trade policy, along with subdued demand for the US Dollar (USD) and Treasury securities. The US Dollar Index (DXY) hovers around 99.50, while yields on 2-year and 10-year US Treasury notes stand at 3.80% and 4.30%, respectively.
Meanwhile, dovish signals from major central banks continue to support non-yielding assets like bullion. Softer-than-expected inflation in the US, Canada, UK, India, and the Euro Area in March—alongside the PBoC’s potential rate cut this quarter—further bolsters the case for precious metals.
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.