Silver Prices Decline Amid Trump`s Tariff Threats and Market Uncertainty by Amit Gupta, Kedia Advisory
Silver prices dropped to around $30, as the US Dollar regained strength following escalating tariff threats from US President Donald Trump. Trump’s new tariffs on imported chips, pharmaceuticals, steel, aluminum, and copper spooked investors, fueling inflationary concerns and supporting the US Dollar. The market also remains cautious ahead of the February 1 deadline for tariffs on China, Mexico, and Canada. Meanwhile, the photovoltaic industry in China faces overcapacity, potentially curbing silver demand. Investors are also waiting for the US Federal Reserve's monetary policy decision, which may further influence market dynamics.
Key Highlights
* Silver prices drop to $30/oz amid tariff threats.
* Trump's tariff plans revive inflation concerns, boosting USD.
* Market awaits US Fed policy decision this week.
* China’s overcapacity in solar panel industry limits silver demand.
* Traders cautious ahead of February 1 tariff deadline.
Silver prices saw a significant dip to around $30 per ounce on Tuesday, extending the losses from the previous session. This decline was largely driven by the strengthening US Dollar, which rebounded as a result of President Trump's announcement of new tariffs. Trump’s proposed tariffs on imports like chips, pharmaceuticals, steel, and aluminum sparked inflationary fears, leading to a modest recovery in US Treasury bond yields. As a result, the US Dollar strengthened, creating a headwind for silver prices.
Further weighing on silver was the ongoing uncertainty surrounding global trade. Investors are on edge ahead of the February 1 tariff deadline targeting China, Mexico, and Canada, which could escalate tensions and affect global markets. Additionally, overcapacity in China’s solar panel industry has prompted a government-led self-discipline initiative, which could dampen demand for silver from this sector, a major consumer of the metal.
The market is also bracing for the US Federal Reserve’s monetary policy decision later this week. The central bank is widely expected to maintain interest rates unchanged, which could further support the US Dollar and influence silver’s price movement. Traders are cautious, waiting for clearer signals from the Fed, while US macro data such as Durable Goods Orders and the Consumer Confidence Index may provide some market impetus.
Finally
Silver prices face headwinds from Trump’s tariff threats and a strengthening US Dollar. The market remains on edge ahead of key US economic data and the Fed’s policy decision.
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