Gold has recorded its worst week in three months, powered by continuous force in the US dollar and steady inflation data. The price index of the personal consumption expenditure (PCE) increased by 0.3%in January, in accordance with expectations, so that the Federal Reserve was kept on a careful path. Although the data did not significantly change the expectations of the rate, it supported the dollar, making non-building assets such as silver and gold less attractive.
Making a profit in gold was still a resistance to silver. After having made record heights earlier in the week, the gold prices could be reduced lower as traders lowered the positions. Historically, silver often follows the direction of Gold and the weakness in gold reinforces Beerarish sentiment on the silver market.
Rate concerns the industrial question Outlook from Cloud Silver
Trade policy developments also ran on silver, in particular because of its role and both industrial and precious metal. President Trump’s announcement of 25% rates for Mexican and Canadian goods, in addition to a 10% service on Chinese import, was concerned about economic growth and industrial demand.
Although inflation usually supports precious metals, the risk of delaying industrial activity could compensate for the appeal of Silver. If rates disrupt production output, the silver demand of important sectors such as electronics and solar technology can weaken, adding a new headwind for prices.
Market front views: Dollar and trade policy remains important drivers
With gold struggling to find support and continues to strengthen the dollar, silver remains vulnerable for further disadvantage. Economic uncertainty that is bound by trade policy and inflation expectations will play a crucial role in the price direction.
Traders must follow Gold’s performance closely, because every recovery can offer some support to silver. However, if the dollar continues to rise and the industrial demand slows down, silver can remain under pressure in the short term.