Silver Price Forecast: XAG/USD breaks above $33.00 following Trump's new tariff threat
- Silver price rose as US President Donald Trump's latest tariff threat boosted demand for safe-haven assets.
- President Trump also plans to introduce pharmaceutical tariffs within the next two weeks.
- The Federal Reserve is widely expected to leave interest rates unchanged on Wednesday.
Silver price (XAG/USD) extends its gains for the second successive session, trading around $33.10 per troy ounce during the Asian hours on Tuesday. The prices of the precious metals, including Silver, rose as President Donald Trump's new tariff threat spurred demand for safe-haven assets.
President Trump announced plans to direct the US Trade Representative and the Commerce Department to begin imposing a 100% tariff on films produced abroad. On Monday, he also stated that he intends to introduce pharmaceutical tariffs within the next two weeks.
The upside of the dollar-denominated Silver could be restrained as the higher US Dollar (USD) could make the precious metal cheaper for buyers with foreign currencies. The Greenback is strengthening ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
While the Fed is widely expected to keep interest rates unchanged, markets are closely watching Chair Jerome Powell’s comments, particularly amid tariff-related uncertainty and mounting pressure from President Donald Trump for rate cuts.
On the trade front, Treasury Secretary Scott Bessent stated Monday that the US is “very close to some deals,” echoing Trump’s weekend remarks suggesting progress in trade negotiations. However, Trump ruled out a meeting with Chinese President Xi Jinping this week. China’s Commerce Ministry said on Friday it is reviewing a US proposal to resume talks.
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.