Silver (XAG/USD) saw a slight uptick during Thursday’s Asian trading session, reaching $32.25. The metal’s gains were largely driven by heightened safe-haven demand, spurred by escalating trade war tensions. Traders are also awaiting key U.S. economic data, including the weekly Initial Jobless Claims and Producer Price Index (PPI), which are set to be released later today.
On Monday, U.S. President Donald Trump imposed a 25% tariff on all steel and aluminum imports, with no exceptions or exemptions. The White House indicated that Trump could announce a reciprocal tariff plan as early as Thursday. The President has threatened to impose similar tariffs on “every country” that levies import duties on U.S. goods, further escalating concerns about a global trade conflict.
These trade tensions are bolstering demand for safe-haven assets like silver, as investors seek shelter from the risks posed by a potential trade war.
In addition, U.S. inflation data released on Wednesday showed a larger-than-expected increase in consumer prices for January. This has fueled speculation that the Federal Reserve may maintain its higher interest rate stance for longer as it continues its battle against inflation. Fed Chair Jerome Powell emphasized that while the central bank has made significant progress in tackling inflation, more work remains. This sentiment has reinforced the “higher for longer” rate narrative, which could boost the U.S. Dollar and apply downward pressure on USD-denominated commodities like silver.
Adam Button, chief currency analyst at ForexLive, noted that regardless of the reason behind the surprise inflation data, the Fed remains committed to not cutting rates until inflation approaches its 2% target. This stance could weigh on silver prices in the long term as the greenback strengthens.
As the market waits for more economic updates, including Thursday’s PPI and jobless claims figures, silver’s movement will likely remain tied to the evolving trade and monetary policy outlooks.
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