Silver prices surged as renewed trade policy uncertainty weighed on the US dollar, boosting demand for the metal. Market reaction to former President Donald Trump’s proposed tariff policies has fueled speculation over future US trade relations, leading investors to seek safe-haven assets like XAG/USD.
The dollar weakened after reports suggested that Trump, if re-elected, could reintroduce aggressive tariff measures, potentially disrupting global trade and stoking inflationary pressures. A weaker greenback typically benefits silver and other commodities, making them more attractive to international buyers.
Silver’s rally also reflects broader market uncertainty, as traders weigh the potential economic fallout of protectionist trade policies. If new tariffs increase input costs for businesses and slow economic growth, demand for hedging assets like precious metals could rise further.
Meanwhile, Federal Reserve policy expectations remain a key driver for silver’s price action. While the central bank has maintained a cautious stance, signs of economic strain or heightened inflation risks due to tariffs could influence future rate decisions. A more dovish stance from the Fed would likely support further gains in XAG/USD.
XAG/USD 1-D Chart as of February 13th, 2025 (Source: TradingView)
Industrial demand for silver also remains strong, with the metal playing a crucial role in renewable energy and electronics production. If trade tensions disrupt supply chains, silver’s industrial value could further drive price appreciation, adding another layer of support.
Despite silver’s recent strength, analysts caution that short-term volatility remains a risk. If US economic data comes in stronger than expected or trade fears ease, the dollar could regain footing, potentially capping silver’s upside.
For now, XAG/USD remains in focus, with investors closely monitoring trade policy developments and US monetary signals for the next potential move in silver markets.
