Silver Price (XAG/USD) attracts some buyers to almost $ 52.60 during the early Asian Session on Tuesday. The white metal has reached a fresh height all the time and surpassed its previous top from 1980 when a historic short terminated in London intensified.
The rally in the silver prize is strengthened by concerns over an exhaustive silver portfolio in London, which ran prices for a prize over those seen in New York and caused the traders to send metals across the Atlantic to make a profit.
In addition, global trading uncertainties have given rise to demand for a safe port and supports precious metal. US President Donald Trump on Friday threatened another 100% duty on Chinese goods from November 1 in return for new export controls, which Beijing is planning for valuable rare earth minerals.
Dovish remarks from Federal Reserve (Fed) officials also lift the silver price. Philadelphia fed the new President Anna Paulson said on Monday that increasing risks to the job market are arguing for more interest rates from the US central bank, as trade rares now seem unlikely to push up to inflation as much as expected. Lower interest rates could reduce the cost of keeping silver and supporting the non-disgusting precious metal.
On the other hand, renewed demand for the US dollar (USD) and improved risk meadows weighing on the USD-denomined raw material price in the short term. Trump changed his rhetoric against China on Sunday and said that China’s economy “will be fine” and that the US wants to “help China, not hurt it.”
Silver frequently asked questions
Silver is a precious metal that is much traded among investors. It has historically been used as a store with value and an exchange medium. Although less popular than gold, dealers can turn to silver to diversify their investment portfolio, for its own value or as a potential hedge in periods of high inflation. Investors can buy physical silver, in coins or in bars or trade it through vehicles such as exchange -divided funds that track its price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can make the silver price escalate because of its safe port status, though to a lesser extent than Gold’s. As a yield asset, silver tends to rise with lower interest rates. Its movements also depend on how the US dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong dollar tends to keep the price of silver in check, while a weaker dollar is likely to drive prices up. Other factors such as investment demand, mining – silver are much more plentiful than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, especially in sectors such as electronics or solar energy, as it has one of the highest electrical conductivity for all metals – more than copper and gold. An increase in demand can increase prices, while a decrease tends to lower them. Dynamics in the United States, Chinese and Indian economies can also contribute to price fluctuations: for the US and China in particular, their large industrial sectors use silver in various processes; In India, consumer demand for precious metal for jewelry also plays a key role in setting prices.
Silver prices tend to follow Gold’s movements. As gold prices rise, silver typically follows, as their status as safe-port assets are the same. The relationship with gold/silver showing the number of ounces of silver needed to correspond to the value of an ounce of gold can help determine the relative valuation between both metals. Some investors may consider a high relationship as an indicator that silver is underestimated or gold is overrated. On the contrary, a low relationship may indicate that gold is underestimated compared to silver.