XAG/USD rebounds above $30.00 amid global trade war
The Silver price (XAG/USD) recovers to around $30.05 during the early European trading hours on Monday. The white metal edges higher as the fear of tariff wars and the potential global recession boost the safe-haven demand.
Silver price has witnessed heightened volatility since last week in response to the US imposing reciprocal trade tariffs on key trading partners. Mounting fears of recession over the impact of a global trade war triggered by US President Donald Trump's reciprocal tariffs dampen market sentiment and undermine the precious metals.
Furthermore, strong industrial demand, especially from new-age industries like EVs and solar energy, creates tailwinds for the white metal. Gains are also expected in the consumer electronics market, as the development of artificial intelligence systems will continue to boost product offerings.
Silver generally moves with gold, but industrial applications such as electronics and photovoltaics account for more than half of world demand, which is estimated to be approximately 700.2 million troy ounces by 2024, according to the Silver Institute industry association.
Traders will keep an eye on the US Consumer Price Index (CPI) inflation data for March, which will be published later on Thursday. If the report shows cooler-than-expected inflation in the US, this might lift the Greenback and drag the USD-denominated commodity price in the near term.
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.
Source: Fxstreet
