XAG/USD jumps to near $33 as US-China trade tensions ease
Silver price (XAG/USD) trades firmly around $33.00 during North American trading hours on Wednesday. The white metal strengthens as fears of an intense trade war between the United States (US) and China have diminished after President Donald Trump signaled the possibility of a deal with Beijing.
“Discussions with Beijing are going well,” Trump said on Tuesday while addressing reporters at the Oval Office, and showed optimism that both nations will “reach a deal”. Trump further added that tariffs on China “would not be as high as 145%, but they wouldn’t be zero”.
Theoretically, easing global economic tensions reduces the appeal of safe-haven assets, Silver. However, the metal is rising due to its industrial demand. Silver has applications in various industries, such as Electric Vehicles (EV), electronic alliances, power and cables, mining etc.
Financial market participants expect that easing tensions between the world’s two largest powerhouses will be favorable for both economies.
Meanwhile, the intraday corrective move in the US Dollar (USD) has also supported the Silver price. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, surrenders initial gains and falls back to near 99.00.
The USD Index gives up intraday gains even though Donald Trump has pushed back fears of sacking Federal Reserve (Fed) Chair Jerome Powell. Still, he is frustrated with Powell for holding interest rates restrictive.
Source : Fxstreet
