The price of silver (XAG/USD) fell after hitting a new record high of $93.90 during the previous Asian hours, and is currently trading around $89.40 per ounce, down over 4% during the European hours on Thursday. The gray metal fell amid easing geopolitical concerns.
US President Donald Trump said reports indicate that killings linked to the crackdown in Iran are declining and that there are no plans for mass executions, while adding that the US will continue to monitor the situation and did not rule out possible military action.
Non-interest bearing silver remains under pressure as the United States (US) Producer Price Index (PPI) and retail sales are stronger than expected, coupled with a decline in the unemployment rate last week, reinforcing expectations that the Fed will keep interest rates unchanged in the coming months. Traders will likely monitor the weekly US initial jobless claims data and the Philadelphia Fed’s manufacturing survey released later on Thursday.
The U.S. Census Bureau reported Wednesday that retail sales rose more than expected to $735.9 billion in November, up 0.6%, after a 0.1% contraction in October and beating market expectations for a 0.4% increase. Meanwhile, the Producer Price Index (PPI) came in hot in November, with key and core metrics hitting 3% year-on-year.
US President Donald Trump refrained from imposing new tariffs on imports of critical metals, easing trade tensions and reducing safe-haven demand for silver. The move avoids spot supply disruption and supports the US dollar’s rise, keeping non-interest bearing silver under pressure. However, continued policy uncertainty and strong industrial demand help limit deeper downside risks.
Demand for precious silver may emerge as a safe haven amid renewed concerns about the independence of the Federal Reserve. Federal Reserve Chairman Jerome Powell criticized the Trump administration’s decision to recall him, saying it amounted to intimidating the Fed into offering easier monetary policy.
Frequently asked questions about silver
Silver is a precious metal that is widely traded among investors. It has been used historically as a store of value and medium of exchange. Although less popular than gold, traders may turn to silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during periods of high inflation. Investors can buy physical silver, in the form of coins or bullion, or trade it through instruments such as exchange-traded funds, which track its price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession could cause the price of silver to rise due to its safe-haven status, although to a lesser extent than the price of gold. As a non-yielding asset, silver tends to rise as interest rates fall. Its movements 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, while a weak dollar is likely to push prices higher. Other factors such as investment demand, mining supplies – silver is more plentiful than gold – and recycling rates can also influence prices.
Silver is widely used in industry, especially in sectors such as electronics or solar energy, as it has one of the highest electrical conductivity of all metals – more than copper and gold. A rise in demand can cause prices to rise, while a fall tends to bring them down. Dynamics in the economies of the United States, China and India can also contribute to price fluctuations: for the United States, and especially China, its large industrial sectors use silver in various processes; In India, consumer demand for the precious metal used in jewelery also plays a major role in determining prices.
Silver prices tend to follow gold movements. When gold prices rise, silver usually follows suit, as its status as a safe haven asset is similar. The gold/silver ratio, which shows how many ounces of silver are needed to equal the value of one ounce of gold, may help determine the relative valuation between the two metals. Some investors may consider a high ratio to be an indication that silver is undervalued, or that gold is undervalued. Conversely, a low ratio may indicate that gold is undervalued compared to silver.
