Silver price was down in the European trading session on Wednesday, its fourth loss-making session in the last five days. Despite the pilling global trade tariff wars driving investors to safe haven assets, low industrial demand for silver has brought pressure on the commodity’s price. XAGUSD was at $37.18 at the time of writing, down by 0.08%.
Leading global economies, the US, China, Canada and Mexico are locked in a trade tariff war affecting more than $1.2 trillion worth of goods. That has created a sour sentiment in the global market, necessitating the inclination towards safe haven assets like gold and silver.
However, silver’s use as an industrial metal predisposes it to the shocks in the tariff ecosystem. Also, Federal Reserve Chairman, Jerome Powell stated on Tuesday that the US economy is stable with a strong jobs market. Also, he cited trade tariffs as a limiting factor on the number of interest rate cuts this year. That will likely strengthen the headwinds on silver prices.
That said, the Middle East ceasefire faces an acid test as Israel and Hamas are on the brink of reigniting the war. An escalation could provide support to silver prices, driven by safe haven demand.
Silver price pivots at $31.87 and resistance at that level signals bearish control. The metal will likely move lower to find the first support at $31.69. However, a stronger downward momentum could break below that level and test the second support mark at $31.55.
Alternatively, moving above $31.87 will favour the buyers to be in control. That could see the XAGUSD pair move higher and encounter the first resistance at $32.04. An extended upward momentum will break above that level and invalidate the downside narrative. In addition, the resulting momentum could trigger a stronger upward push to the second resistance at $ 32.18.
This post was last modified on Feb 12, 2025, 12:25 GMT 12:25