Silver Recovers Near $30.50 As Trump Tariff Threat Keeps Outlook Intact
Silver (XAG/USD) prices recovered most of their intraday losses and rebounded near $30.50 in the European session on Friday (1/31). The white metal bounced back strongly as its outlook remained strong amid concerns that US President Donald Trump will impose 25% tariffs on Canada and Mexico on Saturday for allowing illegal immigrants and the deadly opioid fentanyl into the economy. Such a scenario could lead to a trade war, increasing geopolitical uncertainty, which is beneficial for precious metals, such as Silver.
Donald Trump has also threatened to impose 100% tariffs on the BRICS in an attempt to create a new currency to reduce their dependence on the US Dollar. On his social media platform, Truth Social, on Thursday, Trump said, “There is no chance that the BRICS will replace the US Dollar in International Trade or anywhere else, and any Country that tries should say hello to Tariffs and goodbye to America.” Meanwhile, the US Dollar (USD) also gained traction on Trump’s tariff threats but traded subdued in European trading hours ahead of the US Personal Consumption Expenditures (PCE) Price Index data for December, due out at 13:30 GMT.
Economists expect core PCE inflation to have risen by 0.2% against the 0.1% growth seen in November on a monthly basis, with the annualized figure growing steadily at 2.8%. Signs of persistent inflationary pressures will raise market expectations that the Federal Reserve (Fed) will keep interest rates at current levels for an extended period. On Wednesday, the Fed kept its key lending rate unchanged at 4.25%-4.50% and signaled that the central bank would remain in wait-and-see mode until it sees real progress in inflation or some weakness in the labor market.
Source: FXStreet
