- Silver price gains ground as safe-haven demand improves due to uncertainty from tariffs.
- The Trump administration would likely set a tariff of “a little over 10%” for those smaller countries.
- June’s US inflation data reignited concerns about prolonged high Fed interest rates.
Silver price (XAG/USD) gains ground after registering losses in the previous two sessions, trading around $37.80 per troy ounce during the Asian hours on Wednesday. The safe-haven demand for Silver grows amid uncertainty from tariffs.
US President Donald Trump sent notified 25 countries of new tariff rates set to take effect on August 1st, including major trading partners Canada, Mexico, and the European Union (EU). Moreover, Trump said late Tuesday that letters notifying smaller countries, including nations in Africa and the Caribbean, of their US tariff rates would go out soon, per Reuters. Trump further stated that his administration would likely set a tariff of “a little over 10%” for those countries.
The non-interest-bearing Silver may face challenges as the US inflation report for June reignited concerns about prolonged high Federal Reserve (Fed) interest rates. The US Consumer Price Index (CPI) rose 2.7% year-over-year in June, matching market expectations. Core CPI came in at 2.9%, just below the 3.0% forecast but still notably above the Federal Reserve’s 2% target. Traders will likely observe the upcoming US Producer Price Index (PPI) later on Wednesday, followed by the Fed Beige Book and Industrial Production.
The dollar-denominated Silver may also struggle as the US Dollar (USD) continues to draw support from a cautious tone surrounding the Fed’s policy outlook, driven by hotter US CPI figures. It is important to note that a Stronger USD dampens the Silver demand as making it expensive for buyers with foreign currency. The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is holding ground around 98.50 at the time of writing.
