Created
: 2025.06.10
2025.06.10 11:41
Silver price (XAG/USD) halts its three-day winning streak, trading around $36.50 per troy ounce during the Asian hours on Tuesday. Prices of precious metals, including Silver, receive downward pressure from weakened safe-haven demand amid rising hopes for a cooldown in the United States' (US) latest broad tariff tensions with China.
Treasury Secretary Scott Bessent mentions discussions held on Monday as a "good meeting." At the same time, Commerce Secretary Howard Lutnick noted them as "fruitful," increasing expectations of progress in improving relations between the two countries.
Officials from the US and China are expected to meet again on the second day on Tuesday at 10.00 a.m. in London. Trade talks will continue as the world's two largest economies look to ease tensions over shipments of technology and rare earth elements, per Bloomberg.
The non-yielding Silver gained support, possibly driven by Citigroup's forecasts on Monday, expecting the Fed may deliver a 25 basis point rate cut each in September, October, and December. The firm also expects the central bank to cut 25 basis points each in January and March 2026.
However, the recent stronger jobs data from the United States (US) raised the expectations of the Federal Reserve (Fed) keeping its benchmark interest rate unchanged at its next two monetary policy meetings. Traders await the US Consumer Price Index (CPI) inflation, scheduled to be released on Wednesday, seeking fresh insights into the Federal Reserve's monetary outlook.
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.
Created
: 2025.06.10
Last updated
: 2025.06.10
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