Silver (XAG/USD) continued its upward trajectory for the third straight session on Thursday, trading around $33.30 per troy ounce during Asian market hours. The precious metal’s gains are driven by rising safe-haven demand amid escalating U.S. trade tensions and growing concerns over a potential economic slowdown.
Trade Uncertainty and Economic Fears Boost Silver
Investor anxiety intensified after U.S. President Donald Trump imposed higher tariffs on steel and aluminum imports, fueling economic uncertainty and bolstering silver’s appeal as a safe-haven asset. Trump’s remarks describing the economy as being in a “transition period” were interpreted as a warning of possible economic turbulence ahead, further supporting demand for non-interest-bearing commodities like silver.
Cooling Inflation Strengthens Rate Cut Expectations
Silver’s rally was also supported by weaker-than-expected U.S. inflation data for February, increasing market speculation that the Federal Reserve could cut interest rates sooner than anticipated.
According to the latest figures, monthly headline inflation slowed to 0.2% from 0.5% in January, while core inflation eased to 0.2%, falling short of the expected 0.3%. On an annual basis, headline inflation dropped to 2.8% from 3.0%, while core inflation moderated to 3.1% from 3.3%. These softer inflation readings have fueled expectations of a Fed rate-cut cycle, making silver more attractive to investors.
Weaker U.S. Dollar Supports Silver Demand
A declining U.S. dollar has further boosted silver prices, as a weaker Greenback makes dollar-denominated commodities more affordable for foreign buyers. At the time of writing, the U.S. Dollar Index (DXY), which tracks the USD against a basket of six major currencies, remains steady around 103.50, under pressure from cooling inflation.
Market Awaits Key U.S. Economic Data
Investors are now eyeing the upcoming U.S. Producer Price Index (PPI) and weekly jobless claims data for fresh economic insights. These reports could influence the Federal Reserve’s monetary policy outlook and drive short-term market movements in silver prices.
