Silver rose to around $31.5 per ounce on Tuesday, hovering near its highest level since early December as an escalating trade war between the US and China boosted demand for safe-haven assets.
Silver rebounds as trade war fears diminish
Investor sentiment turned bullish after China announced retaliatory tariffs in response to President Donald Trump’s 10% tariffs on all goods imported from China, fueling concerns about prolonged economic uncertainty. Earlier, Trump agreed to delay imposing 25% tariffs on Canada and Mexico for a month after both nations pledged to implement stricter measures to curb migration and drug trafficking, easing some trade tensions in North America.
What affects silver prices
Meanwhile, strong US manufacturing data from the Institute for Supply Management (ISM) indicated long-awaited traction in factory activity, reinforcing optimism about silver’s industrial applications, particularly in electrification technologies such as solar panels and electric vehicles. Additionally, growing expectations of Federal Reserve rate cuts to support economic growth further bolstered silver prices, as lower interest rates reduce the opportunity cost of holding non-yielding assets like precious metals.
Outlook from Silver Institute
On the supply side, the Silver Institute recently projected a fifth consecutive year of significant market deficits for the metal in 2025, driven by robust industrial demand and continued retail investment. Despite some weakness in jewelry and silverware consumption, tightening supply and strong demand fundamentals are expected to keep silver prices elevated in the near term.
