Silver prices fell below $33 per ounce on Monday, extending losses from the previous session, as easing US-China trade tensions strengthened the US dollar and dampened demand for safe-haven metals.
Silver slides amid easing US-China trade tensions
The decline in silver prices reflects broader market sentiment as investors shift away from traditional safe-haven assets in response to the improving outlook on global trade. Last week, US President Donald Trump signaled his openness to lowering Chinese tariffs, a move that was seen as a sign of potential de-escalation in the protracted trade war between the two largest economies in the world. In a related development, Beijing announced it would exempt certain US goods from its 125% levies, signaling a gesture of goodwill as trade negotiations continue. This news boosted risk appetite among investors, which in turn led to a strengthening of the US dollar and a retreat from precious metals like silver, traditionally viewed as safe-haven assets during periods of uncertainty.
Further contributing to market optimism, Washington is set to hold additional trade talks with other major economies this week, including Japan and South Korea, suggesting a broader move toward multilateral efforts to ease global trade tensions. While these talks have not yet yielded any substantial breakthroughs, the mere prospect of progress in global trade discussions has led investors to reassess their portfolios and reduce their positions in safe-haven commodities.
China expressed cautious optimism regarding its economic performance
Meanwhile, China expressed cautious optimism regarding its economic performance, reaffirming its confidence in meeting its full-year growth target of around 5%. However, despite the positive rhetoric, Chinese officials refrained from announcing immediate stimulus measures, opting instead to first assess the full impact of the escalating trade dispute with the US. This wait-and-see approach has left markets uncertain about the future direction of China’s economic policy, especially as the country faces mounting pressure from trade disruptions and weakening global demand.
Investors are also closely monitoring key US economic data scheduled for release this week, which could significantly influence market expectations for Federal Reserve monetary policy. A strong set of data, particularly on jobs and inflation, could reinforce expectations for earlier Federal Reserve rate cuts, further strengthening the US dollar and potentially continuing to weigh on precious metals. Any shift in the Fed's stance, particularly in light of global trade developments, will be a key factor in determining the future trajectory of silver and other commodities.
