Moreover, the expectations of two potential interest rates by the Federal Reserve this year are the attraction of Gold, as lower rates lower the opportunity costs to keep non-return assets.
However, the recent suspension of the rates on Mexico and Canada, after a border security agreement, has improved the investor sentiment compared to riskier assets. This shift has removed the American treasury yields and stimulated stock markets, which could close further gold prize profits in the short term.
Silver faces headwind of risk-on sentiment and stronger dollars
Silver (XAG/USD) traded at $ 31.43 after falling to an Intrad-Day low of $ 31.36. In contrast to gold, silver with downward pressure is struggling, mainly as a result of an improved risk sentiment after the US tariff break with Mexico and Canada.
This development has strengthened the US dollar and the US treasury yields, both of which roads on silver prices.
Despite this pressure, the decline of Silver remains moderate, as a result of the dual roll as both an industrial and a precious metal. Market participants are closing the upcoming US economic data, which can shift current dynamics as signs of economic weakness.
Recent US economic data has shown resilience despite trade stresses. The ISM production PMI rose in January to 50.9 of 49.3 in December, which exceeds expectations and indicates the expansion in the production sector.