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Commodities Silver

Silver Shines in Times of Global Uncertainty: XAG/USD Trades Near Five-Month Highs as Geopolitical Tensions Rise

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  • March 17, 2025
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Silver (XAG/USD) remains trading close to a five-month high of $34.00 on high safe-haven demand as global economic uncertainty and geopolitical tensions increase. The latest Middle Eastern conflict, the missile and drone attack by the Houthis on the USS Harry S. Truman aircraft carrier, has boosted investor interest in precious metals. While Silver has experienced minor corrections, it still enjoys good support because of apprehensions over emerging trade wars as well as overall instability. Meanwhile, optimism around potential ceasefire talks between Trump and Putin for an end to the Ukraine conflict would limit further bullishness. Still, market operators are also watching for crucial decisions from key central banks this week, notably the US Federal Reserve’s policy projections, which will determine Silver’s next direction of movement. KEY LOOKOUTS • Continued Middle East tensions, particularly the Houthis’ attack, remain to enhance Silver’s safe-haven status, underpinning prices at multi-month highs. • Speculation of a possible Trump-Putin meeting on a Ukraine ceasefire would ease global uncertainty and cap Silver’s near-term upside momentum. • Market participants look forward to significant central bank gatherings, particularly the US Fed’s interest rate decision, which would sharply influence Silver’s near-term price direction. • Rising trade tensions and tariff wars between the US and key partners could boost market volatility, benefiting safe-haven assets such as Silver. Silver prices are in the spotlight with the metal trading at almost a five-month peak, underpinned by robust safe-haven demand as geopolitics heat up and global economic uncertainty increases. Recent Houthi attacks on the USS Harry S. Truman aircraft carrier have served to increase investor risk aversion, again spurring demand for precious metals. But future ceasefire negotiations between Trump and Putin over the Ukraine war could soften risk appetite and limit Silver’s upside potential. Investors are also keenly observing major central bank announcements this week, particularly the US Federal Reserve’s policy stance, which could be instrumental in deciding Silver’s next direction. Silver is trading close to a five-month high at $34.00, driven by safe-haven buying on the back of rising Middle East tensions and global uncertainties. But potential Trump-Putin ceasefire talks and future central bank actions could dictate Silver’s next direction. • Silver price trades close to $34.00, holding near its five-month high on strong safe-haven demand. • Geopolitical risk increases as the Houthis take responsibility for a bombing of the USS Harry S. Truman aircraft carrier in the Red Sea. • Safe-haven demand intensifies, with investors fleeing to precious metals amid growing global uncertainty and conflict. • US threatens more strikes on Houthis, as the Iran-supported group promises additional retaliation, boosting market risk sentiment. • Trump-Putin ceasefire negotiations anticipated, potentially calming tensions in Ukraine and topping further upside for Silver prices. • Market participants look forward to major central bank meetings, particularly the US Federal Reserve interest rate decision, which may affect Silver’s trajectory. • Trade war fears rise, with tariff tit-for-tat between the US and its key trading partners underpinning Silver’s defensive allure. Silver remains a powerful investor draw as global uncertainties increase, beyond the usual concerns over inflation or interest rates. The latest attack on the USS Harry S. Truman aircraft carrier by Iran-backed Houthi forces has heightened fears in the Middle East, driving investors to safe-haven assets such as Silver. The United States has acted strongly, threatening to take further action against the Houthis, and the group has threatened further attacks, further increasing global concern. In times of such uncertainty, Silver is still a safer option for those looking for stability in the face of geopolitical tensions and increasing global threats. XAG/USD Daily Price Chart Chart Source: TradingView Concurrently, political changes around the world are influencing market mood. Hopes for a possible ceasefire in Ukraine have risen as former US President Donald Trump and Russian President Vladimir Putin are set to sit down for talks. Any developments in the negotiations could change the global risk perception and investment patterns. Furthermore, the prevailing issues of trade tensions and economic policy also add to the uncertain atmosphere. While the world waits for central bank rates decisions and major political events, Silver remains robust, still representative of the market’s call for protection and safety. TECHNICAL ANALYSIS Silver (XAG/USD) continues to be well-supported just shy of its five-month high at $34.00, indicative of strong bullish pressure. While small pullbacks have been seen, the trend structure is positive so long as the price remains above pivotal support areas. A persistent trend of higher highs and higher lows reflects ongoing buying interest, and any consolidation at current levels could act as a base for the next possible upward move. Traders will be closely observing a breakout above recent resistance, which would potentially open the way for further advances, while a fall below immediate support could initiate short-term corrections. FORECAST Silver could see further gains if geopolitical tensions continue to rise, particularly in the Middle East. Prolonged conflicts, like the recent Houthi raids and threats of counterattacks, are likely to maintain safe-haven demand strong. And if global trade war fears intensify or economic uncertainty grows, investors are likely to seek more recourse to Silver as a hedge, potentially driving prices above the recent five-month peak. A positive change of investor sentiment or dovish words from central banks, especially the US Federal Reserve, can also help a new upsurge in Silver prices. Alternatively, Silver’s advance may be opposed by a reduction in global tensions. Any good news from the expected ceasefire negotiations between Trump and Putin over the conflict in Ukraine can dampen safe-haven demand, potentially dropping Silver prices. In addition, if central banks, particularly the Federal Reserve, become more hawkish or if economic signals tend towards stability, then this could divert investor attention back towards riskier assets, and Silver may correct lower. A fall below crucial support levels may initiate additional profit-taking and increase short-term selling pressure.

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Commodities Silver

Silver Falls Below $32.50 as China Deflation Intensifies and Trade Tensions Rise

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  • March 10, 2025
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Silver prices (XAG/USD) fell below $32.50 an ounce for the third consecutive session as demand worries heightened due to softer Chinese economic data. China’s lower Producer Price Index (PPI) and Consumer Price Index (CPI) reflect ongoing deflationary forces in the manufacturing sector, a major driver of silver usage. In spite of bearishness, downside risk in the safe-haven metal remains contained with increased global trade tensions, including a 100% tariff levied by China on Canadian agriculture imports in retaliation against previous tariffs. Moreover, mounting fears surrounding the stability of U.S. economy and business volatility may support the safe-haven demand of silver in the near future. KEY LOOKOUTS • China’s persistent deflation in the industrial sector could continue to reduce silver demand and pressure prices in the face of declining global manufacturing. • Increasing trade tensions, such as China’s 100% tariff on Canadian imports, could drive safe-haven demand and support silver prices. • Deteriorating U.S. economic conditions and business sentiment could improve the appeal of silver as a hedge against market volatility. • The Federal Reserve’s any dovish comments on economic deceleration could push up precious metal demand, and silver’s present bearish trend may be reversed. Silver prices continue to stay weak with deflation fears in China and increasing global trade tensions putting immense pressure on sentiment. With the recent reading of China’s Producer and Consumer Price Index numbers showing further evidence of weakness in industrial demand, fears of lowered consumption are pulling silver down. But geopolitical events, including China’s retaliatory 100% tariff on Canadian farm imports and rising trade tensions driven by policies under Trump, may reawaken safe-haven demand. And growing uncertainty regarding the U.S. economic outlook, signaled by dovish comments from the Federal Reserve, may offer support for silver prices in the short term. Silver prices fall below $32.50 following weaker Chinese economic data, increasing fears about industrial demand. However, rising trade tensions and economic uncertainty in the U.S. could support the metal’s safe-haven allure. • Silver prices fall below $32.50 on worries about weakening China industrial demand. • China’s Producer Price Index declined 2.2% YoY, indicating continued industrial deflation. • China’s Consumer Price Index also fell by 0.7%, driven by wider economic weakness and lackluster consumption. • Trade tensions rise as China hits Canadian farm products with a 100% tariff in retaliation. • Geopolitical progress sees global markets stay on their guard with safe-haven metals such as silver in higher demand. • Uncertainty for U.S. businesses increases, with Fed officials cautioning against possible consequences on economic demand and growth. • Technical indicators indicate long-term bearish momentum, with silver resisting around $33.00 and finding support at $32.00. Silver prices are under pressure as anxiety mounts over the deterioration of China’s economic conditions, a world-leading consumer of industrial metals. Recent figures that indicate declines in China’s Producer and Consumer Price Index are manifestations of intensifying deflationary trends, a sign of shrinking industrial activity and decelerating demand. This has sent fears in global markets, particularly over commodities such as silver that have strong correlations with manufacturing and production industries. XAG/USD Daily Price Chart Chart Source: TradingView Meanwhile, increasing international trade tensions are contributing to market uncertainty. China’s announcement that it would levy a 100% tariff on Canadian agricultural products has further ratcheted up the current trade war. These types of geopolitical events tend to drive demand for safe-haven assets such as silver, even in periods when economic indicators are poor. In addition, increased uncertainty about the U.S. economic outlook and business sentiment can further contribute to silver’s status as a hedge against wider market volatility. TECHNICAL ANALYSIS Silver is now displaying indications of ongoing bearish momentum following the breakdown below major support around the $32.50 level. The metal has been trending lower for the third straight session, indicating persistent selling pressure. Unless the price recovers upward strength, it can test the next support level around $32.00, whereas any bounce may meet resistance near the $32.80–$33.00 area. Momentum gauges like RSI and MACD also point to a weakening trend, which means that the bears are firmly in command unless a strong reversal signal appears. FORECAST Silver prices may rebound even with recent pressure if safe-haven demand improves as global uncertainties increase. Increasing trade tensions, particularly China’s retaliatory tariffs and general geopolitical uncertainty, might propel investors into precious metals. Also, any indications of the U.S. economy slowing down might encourage the Federal Reserve to go more dovish, thereby weakening the dollar and boosting silver prices. Breaking above the $32.80–$33.00 resistance area might unlock more upside traction in the short term. Silver, however, could continue to come under downward pressure if poor economic data from China continue and industrial demand continues to be weak. Further deflationary tendencies in China’s manufacturing industry may weigh significantly on silver consumption and cap price recovery. Should bear momentum persist and prices break below the $32.00 support level, the next major downside target is seen around $31.50. In addition, a stronger dollar or hawkish Fed signals would also dampen silver’s rise. 

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