Silver holds firms amid weaker dollar and yields

Silver prices hovered around $38.90 per ounce on Tuesday, holding near 14-year highs as a weaker dollar and lower Treasury yields continued to bolster demand for precious metals. These supportive macroeconomic conditions have reinforced silver’s appeal as both a hedge against inflation and a safe haven amid growing geopolitical and trade uncertainties.

The dollar's softness, in particular, has made dollar-denominated assets like silver more attractive to foreign investors, while easing bond yields reduce the opportunity cost of holding non-yielding metals.

Investor focus remains firmly on the upcoming August 1 deadline for countries to finalize trade agreements with the United States, a key risk event that could trigger further volatility in global markets. The lack of progress in talks has prompted a cautious stance among market participants, contributing to increased flows into safer assets like silver and gold.

On the monetary policy front, attention is also centered on upcoming remarks from Federal Reserve Chair Jerome Powell, expected later today. Traders are closely watching for any shift in tone that might hint at the Fed’s next move.

While the U.S. President Trump has renewed calls for aggressive rate cuts to support economic competitiveness, futures markets still reflect expectations that the Fed will hold rates steady at its next meeting, though any dovish surprises could further lift silver prices.

In addition to monetary and trade-related drivers, industrial demand prospects are lending further support to silver’s rally. In China, the Ministry of Industry and Information Technology (MIIT) announced a comprehensive action plan aimed at stabilizing growth across 10 major sectors, including autos, machinery, and electrical equipment—all of which are significant end-users of silver for components like batteries, wiring, and photovoltaic systems.

The inclusion of nonferrous metals, such as silver, in the plan underscores Beijing’s commitment to sustaining industrial activity amid broader economic pressures.

With silver’s dual role as a monetary and industrial asset, its price trajectory is increasingly sensitive to developments on both macroeconomic and sector-specific fronts. Analysts note that any indication of stronger-than-expected industrial demand, combined with continued dovish central bank positioning or trade-related market stress, could push prices even higher in the short term.