Silver is experiencing an upward trend, currently trading around $31.30, primarily due to a weakening US Dollar, which has seen the US Dollar Index (DXY) fall to approximately 100.20. The rising US-China trade tensions are also driving demand for safe-haven assets like Silver.
The recent increase in tariffs on Chinese imports has elevated concerns regarding the economic implications of the ongoing US-China conflict. Additionally, softer US inflation data has created expectations for possible Fed rate cuts starting in June.
FOMC Minutes And Inflation Trends
March’s Consumer Price Index (CPI) recorded headline inflation at 2.4% year-over-year, below the anticipated 2.6%. Core CPI, excluding food and energy, rose to 2.8%, leading markets to forecast a potential reduction in Fed rates, potentially by one percentage point by year-end.
Recent Federal Open Market Committee (FOMC) minutes have revealed concerns among policymakers regarding inflation risks amid slowing economic growth. Slight increases in weekly jobless claims, now at 223,000, add to the mixed economic outlook.
Factors influencing Silver prices include geopolitical tensions, economic performance, industrial demand, and the behaviour of the US Dollar. Additionally, Silver is a key industrial metal in sectors such as electronics and solar energy, which impacts its pricing based on demand fluctuations.
Silver prices typically follow Gold’s movements, with the Gold/Silver ratio providing insights into their relative valuations. This ratio helps traders assess opportunities and potential market trends based on price dynamics.
Given the current conditions, it’s apparent that the US Dollar’s weakness — particularly as the DXY inches just above the 100 level — is acting as a prominent driver for Silver’s recent momentum. As the greenback comes under renewed pressure, often a result of mounting bets on loosening monetary policy, commodities priced in USD tend to respond by climbing. We’ve seen this with Silver, now pushing past the $31 mark, largely in response to these pressures.
The CPI print for March came in weaker than forecast, with core figures still showing resilience at 2.8%, while headline inflation dipped to 2.4%. Markets took this as a step towards the Federal Reserve changing its tone. Rate cut speculation, already creeping in since February’s soft retail numbers, got further fuel. Bond yields have adjusted accordingly as traders began repositioning based on the belief that at least one, if not more, rate reductions may be in play before the year ends.
Furthermore, recent tariffs on Chinese goods haven’t gone unnoticed. They’re fanning concerns over supply chains and global trade health. These tensions aren’t just affecting equities and currency markets; they’ve added a layer of appeal for metals perceived as safer when uncertainty spikes. We see this hedge behaviour in the broader commodities complex, but Silver tends to be particularly responsive — sitting at that interesting crossroads of store-of-value and industrial utility.
Silver As Store Of Value And Industrial Utility
From Powell’s camp, the latest FOMC minutes suggest disagreement underneath the surface. Caution is growing, even as inflation hovers above target. It’s less about whether inflation is falling fast enough, and more about how growth might respond in the months ahead. The moderate uptick in jobless claims to 223,000 adds another layer; it hints at early cracks in the labour market, which, if widened, could tip the balance for sooner-than-expected intervention by the Fed.
For us, these signals clarify the direction for short-term positioning. Volatility around Fed communication windows is likely to heighten, and with the dual narrative of geopolitical nerves and slower growth, we anticipate broader commodity demand may keep tilting higher, particularly for metals where investment flows meet industrial consumption.
The industrial side of Silver’s value cannot be ignored either. Usage in green technologies — solar installations, EVs, next-gen electronics — is steadily expanding. If macro signals tilt towards central banks favouring growth over inflation, demand in these areas could strengthen further, putting additional upward pressure on the metal. This technical-meets-fundamental case is what most overlook.
Traders often look at Gold as the bellwether, but the Gold/Silver ratio offers a tighter lens for those positioned across metal spreads. Movements here can help flag moments where relative value switches, especially once one metal decouples slightly from the other, which can occur amid Fed volatility, or in response to global supply shifts.
We would use this context to revisit hedging strategies and re-test resistance points around Silver’s two-year highs. With a mix of macro softness and geopolitical unease, patterns may not conform to clean technicals, and this itself can offer entry for asymmetrical risk profiles particularly when skew in options markets expands.
