Silver prices have declined by nearly 1.5% to around $33.10, driven by a strong US Dollar, with the US Dollar Index nearing 104.00. The Federal Reserve remains cautious about interest rate cuts due to uncertainties around President Trump’s economic policies.
Fed Chair Jerome Powell noted that Trump’s tariff strategies are likely to dampen growth while increasing inflation. The central bank has adjusted its core Personal Consumption Expenditure Price Index (PCE) forecast for this year to 2.8% and lowered GDP growth expectations to 1.7%.
Silver’s value may be affected by geopolitical tensions, especially as Trump plans to introduce reciprocal tariffs on April 2. Traditionally, precious metals are favoured during uncertain times, although higher interest rates challenge non-yielding assets like Silver.
Technically, Silver’s price stays within an Ascending Triangle chart pattern, with resistance around the October 22 high of $34.87 and support at the March 6 high of $32.77. The 20-day Exponential Moving Average near $32.90 indicates the uptrend remains intact.
Silver is a highly traded precious metal, used both as a store of value and in various industries, including electronics and solar energy. Economic conditions in major markets like the US and China, as well as demand for jewellery in India, can influence Silver prices.
Silver usually tracks movements in Gold, with the Gold/Silver ratio helping assess their relative values. A higher ratio may suggest Silver is undervalued, while a lower one might indicate the opposite.
With Silver slipping by nearly 1.5% to around $33.10, largely due to a robust US Dollar, we must consider the broader market reaction. The US Dollar Index has edged close to 104.00, reinforcing the greenback’s strength, which in turn pressures dollar-denominated commodities like Silver. When the currency gains, metals priced in it tend to decline, making them more expensive for holders of other currencies.
Powell’s remarks highlight a key concern: while protectionist policies may support certain domestic industries, they also risk stoking inflation while dampening growth. With the Federal Reserve adjusting its core PCE inflation forecast to 2.8% and trimming GDP growth projections to 1.7%, it’s clear that officials see economic risks ahead. If inflation remains persistent, the central bank will be forced to maintain higher borrowing costs, which typically weakens demand for metals that do not yield interest.
There is also geopolitical uncertainty on the horizon, particularly with fresh trade measures expected on 2 April. These moves could trigger retaliation, affecting investor sentiment. Historically, times of uncertainty tend to strengthen demand for safe-haven assets like metals, but the pressure of elevated rates complicates the picture.
From a technical perspective, prices remain within an Ascending Triangle, a structure often associated with continuation patterns. Resistance rests near the high from 22 October at $34.87, while the support level aligns with the 6 March peak at $32.77. With the 20-day Exponential Moving Average sitting near $32.90, the trend remains intact for now. A break beyond resistance would likely indicate further upside, while a move under support could shift sentiment quickly.
Beyond investment demand, Silver has industrial uses, particularly in electronics and solar panels. Economic conditions in key regions, such as the US and China, as well as jewellery consumption in India, all play a part in shaping demand. Given its tendency to move in tandem with Gold, monitoring the Gold/Silver ratio provides insights into relative value. A higher ratio has historically pointed to possible undervaluation, while a lower one often signals overvaluation.
Taken together, these factors shape how we position ourselves in the weeks ahead. Powell’s measured stance, trade dynamics, and technical signals all merit close monitoring before making any adjustments.
