Silver rises on rebound, capped by dollar and China worries

Silver climbed toward $31 per ounce on Wednesday, likely due to a technical rebound after hitting a one-month low earlier in the week.

Silver rises on the rebound, capped by dollar and China worries

Investors adjusted their positions ahead of a critical US inflation report, which could impact expectations for Federal Reserve rate cuts. Softer-than-expected inflation data might fuel expectations for steady rate reductions, potentially increasing demand for precious metals. However, silver prices remain pressured by a strengthening dollar, supported by expectations of fiscal expansion and inflationary policies under the incoming Trump administration, which could limit the Fed’s ability to lower borrowing costs.

China weakness and tariff concerns weigh on silver demand

Additionally, weak economic data from China and the lack of significant economic stimulus have raised concerns about demand. Silver also faces challenges from its heavy use in electrification, especially in solar panels, with potential tariff increases under Trump adding to the uncertainty.