Silver prices (XAG/USD) regained ground on Monday, trading around $31.30 per troy ounce during the Asian session after two consecutive days of losses. The precious metal benefited from rising safe-haven demand as concerns mount over US President Donald Trump’s tariff policies and escalating geopolitical tensions.
Trade Disputes Boost Safe-Haven Demand
Over the weekend, Trump announced a fresh 10% tariff on Chinese imports, set to take effect on Tuesday, following a similar tariff hike last month. Additionally, 25% tariffs on Canadian and Mexican goods are scheduled to be implemented on March 4, further heightening global trade uncertainty.
In response, China is reportedly considering countermeasures, potentially targeting US agricultural and food products. The retaliation could include both tariff and non-tariff restrictions, such as stricter regulatory scrutiny, customs delays, and other trade barriers.
Geopolitical Uncertainty Adds to Market Jitters
Geopolitical tensions intensified after a public dispute between Trump and Ukrainian President Volodymyr Zelenskyy during peace negotiations. Zelenskyy had been expected to sign a deal granting the US expanded access to Ukraine’s rare earth minerals, but the plan was scrapped following a heated exchange between the two leaders.
The geopolitical rift further bolstered Silver’s appeal as a safe-haven asset amid rising uncertainty.
Fed Rate Cut Bets and Weaker Dollar Support Silver
A weaker US Dollar also underpinned Silver prices, making the metal more affordable for investors holding other currencies. The US Dollar Index (DXY) hovered around 107.30 during Asian trading hours.
Meanwhile, the latest US Personal Consumption Expenditures (PCE) inflation data eased inflation concerns, raising expectations for Federal Reserve interest rate cuts. The January PCE report showed the headline inflation rate steady at 0.3% on a monthly basis, with core PCE easing to 2.6% annually from December’s 2.9%.
Market participants now anticipate that the Fed could begin cutting rates by mid-year, further enhancing Silver’s appeal as a non-yielding asset in the face of easing monetary policy.
As global economic uncertainties persist, Silver’s outlook remains tied to ongoing trade developments, geopolitical risks, and the Federal Reserve’s policy trajectory.
