Silver (XAG/USD) climbed to $32.25 during Asian trading hours on Thursday, driven by heightened safe-haven demand amid escalating trade war tensions. Investors are also awaiting key U.S. economic data, including weekly Initial Jobless Claims and the Producer Price Index (PPI), set for release later in the day.
Trade tensions intensified after U.S. President Donald Trump imposed a 25% tariff on all steel and aluminum imports on Monday, with no exemptions. The White House indicated late Wednesday that Trump could unveil his reciprocal tariff plan as early as Thursday. Trump has signaled plans to impose similar tariffs on any country that levies duties on U.S. exports, further fueling market uncertainty and potentially boosting silver’s appeal.
Meanwhile, inflation concerns persist after U.S. consumer price data released Wednesday exceeded economists’ expectations for January. The stronger-than-anticipated inflation figures raise the likelihood that the Federal Reserve (Fed) will maintain higher interest rates for an extended period. Fed Chair Jerome Powell acknowledged progress in curbing inflation but emphasized that more work remains.
The prospect of prolonged high interest rates could strengthen the U.S. dollar, which may weigh on silver prices, as the metal is denominated in dollars.
“The takeaway is no matter what the reason was for the upside surprise, the Fed has been very clear that it won’t cut rates until inflation is close to 2%,” said Adam Button, chief currency analyst at ForexLive in Toronto.
