Softness of the dollar provides support for silver
The US dollar index fell 0.6% to a two-week low. This strengthened silver’s appeal to foreign investors by making it more affordable in other currencies. Later in the session, the dollar recovered somewhat after President Trump imposed a potential 25% tariff on imports from Mexico and Canada. Despite this rebound, support for silver remained as traders looked for safe-haven assets amid rising economic and geopolitical risks.
Uncertainty about trade policy drives demand for safe havens
Trump’s tariff rhetoric extended beyond North American trading partners, with suggestions of action against China if a TikTok-related deal falls through. Such actions could escalate trade tensions, potentially disrupting global markets and increasing silver’s appeal as a hedge.
Historically, tariffs on China have increased concerns about supply chain disruptions and slowing economic activity, factors that often drive demand for precious metals like silver.
Meanwhile, U.S. Treasury yields fell as traders digested Trump’s series of executive orders and their impact on economic stability. This decline strengthened the risk-off sentiment, further increasing interest in silver and gold as safe havens.
Market Forecast: Key Levels to Watch for Silver
Silver’s next major move depends on a break above the $30.98 resistance level, which could push prices towards the $31.81-$32.33 zone. Persistent rate uncertainty – especially regarding China – is adding to safe-haven demand for silver, but traders should also monitor US economic data such as PMI releases and housing metrics for potential catalysts. On the other hand, crossing the 200-day moving average could lead to greater selling pressure.
For now, silver’s resilience reflects its dual role as an industrial metal and a hedge against market instability, keeping traders focused on its technical and fundamental drivers.