Silver prices rose close to $31.00 per troy ounce on Friday during Asian trading hours. The increase followed recent comments made by President Donald Trump at the World Economic Forum in Davos, Switzerland. Trump called for the US Federal Reserve to cut interest rates immediately.
He said, “With prices falling, I’ll demand that interest rates be cut immediately, and they should be reduced worldwide.”
The president also expressed optimism about reaching a trade deal with China. He mentioned a recent conversation with President Xi Jinping that suggested potential progress in the US-China trade talks. The possibility of lower interest rates has driven demand for silver.
Silver is a non-interest-bearing asset that tends to rise in value when interest rates drop. Trump’s remarks on tariffs have also contributed to the upward trend in silver prices. He expressed a preference to avoid imposing tariffs on China, which is the world’s largest consumer of metals and a major manufacturing hub.
This has strengthened industrial demand for silver. However, traders remain cautious due to uncertainty surrounding the potential impact of Trump’s proposed tariffs and immigration policies. These global economic conditions are prompting investors to turn to safe-haven assets like silver.
Silver influenced by Trump’s Davos comments
Economic indicators support the rising silver prices as well. The US Dollar Index, which measures the dollar’s performance against six major currencies, continues to decline.
At the same time, US Treasury yields are depreciating. The 2-year and 10-year Treasury yields currently stand at 4.26% and 4.63% respectively. The weaker US dollar and declining Treasury yields make non-yielding metals like silver more appealing to investors.
As a result, silver is not only recovering but also gaining momentum. Several factors influence silver prices, including geopolitical instability, economic conditions, industrial demand, and the behavior of the US dollar. Silver’s industrial applications, particularly in electronics and solar energy, mean that changes in industrial demand can have a big impact on prices.
The relationship between gold and silver is also important. Silver prices often follow gold’s movements because both are seen as safe-haven investments. The Gold/Silver ratio indicates the relative value of the two metals and can provide insights into market valuations.
As the global economic landscape continues to change, traders and investors are closely watching developments that could affect silver prices. They will be paying attention to any updates on interest rates, trade negotiations, and industrial demand.