XAG/USD holds onto gains near $32.30 as US-China trade war intensifies
Siver price (XAG/USD) clings to Friday’s gains near $32.30 during European trading hours on Monday. The white metal exhibits strength as the US Dollar (USD) continues to dive amid the intensifying trade war between the United States (US) and China.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 99.60.
China has raised import duties on products from the US to 125%, matching the increase in reciprocal tariffs by President Donald Trump as a countermeasure. Such a scenario is unfavorable for the US economy, given that the impact of higher tariffs will be borne by domestic importers. The event is expected to lead to a significant reduction in the purchasing power of households and a slowdown in the workflow of businesses.
The escalating trade war between the world’s biggest powerhouses has also diminished demand for US assets. Investors have dumped US Treasury bonds amid firming fears of a US recession. During European trading hours, 10-year US Treasury yields have tumbled over 1% but are still 14% from last week. Theoretically, higher bond yields diminish the demand for non-yielding assets, such as Silver, but heightening global tensions have strengthened the demand for safe-haven assets.
Source : Fxstreet
