Silver’s price has dropped a bit to about $38.80, but it is still near a ten-year high of $39.00. This price drop is mainly due to a rising demand for safe-haven assets because of ongoing trade tensions. Trade conflicts between the US and EU are creating global stress, and the EU is planning counteractions to US tariffs. Germany is calling for a tougher approach against the US after President Trump’s suggestion to raise baseline tariff rates. A report from the Wall Street Journal mentioned that Trump wants to set the new tariff rate between 15% and 20%, while also keeping restrictions on automobile tariffs.

The Federal Reserve’s Influence On Silver

Although many expect the Federal Reserve to keep interest rates between 4.25%-4.50%, silver prices have stayed steady. The 20-day EMA is at $37.40, and the 14-day RSI is between 60.00 and 80.00, suggesting a positive trend. The $40.00 level is acting as resistance, while the high from June 18 at around $37.30 serves as support. Silver’s price is shaped by geopolitical tensions and its reputation as a safe haven, plus industrial demand plays a role too. The Gold/Silver ratio is useful for assessing silver’s relative value, as silver often moves in line with gold due to their similar safe-haven characteristics. We believe that the current situation is favorable for silver derivatives. Ongoing trade conflicts lead to market uncertainty, which typically increases interest in safe assets. This scenario establishes a strong basis for silver’s potential price rise in the coming weeks.

Global Geopolitical Strains And Silver

The geopolitical stresses we see are not one-time events; they are part of a larger, ongoing issue. For example, recent US tariffs on Chinese electric vehicles and the EU’s investigations into subsidies show that global trade friction is persistent. This ongoing tension highlights the importance of holding safe-haven assets. In addition to being a good investment, silver has strong industrial demand that helps support its price. The Silver Institute predicts global industrial demand will reach a record 690 million ounces in 2024, mainly due to growth in solar panels and cars. This strong fundamental demand provides added security for long positions. Given the favorable technical outlook, we see pullbacks toward the support level near $37.30 as good buying opportunities for call options or other bullish trades. The $40.00 level remains an important target. If silver breaks above that mark, it could gain even more upward momentum. We are also monitoring the Gold/Silver ratio, which is currently around 79:1—much higher than the 21st-century average of about 60:1. A high ratio usually means silver is undervalued compared to gold, suggesting there is room for silver prices to rise. This relative value makes silver an attractive choice compared to its pricier counterpart. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now