FX.co ★ Silver Declines as Dollar Strengthens

Silver experienced a decline of over 1% on Friday, trading at approximately $33 per ounce, which marked its lowest point in a week. This drop was primarily attributed to the US dollar's recovery. The dollar gained strength following remarks by Federal Reserve Chair Jerome Powell, who reiterated a cautious approach towards further interest rate cuts. While he acknowledged the potential for two cuts later this year, he highlighted concerns over slowing economic growth and labor market issues. Despite these challenges, Powell emphasized the uncertainty regarding President Donald Trump’s tariff policies and their potential impact on inflation, which justified a wait-and-see approach.

In addition to these domestic challenges, ongoing economic uncertainties in China have led to a muted outlook for silver's industrial demand. This is compounded by Beijing's recent announcement of new stimulus measures, which notably lacked specific details. Nevertheless, silver prices have maintained near five-month highs, buoyed by apprehensions regarding supply constraints, partly exacerbated by disruptions linked to Trump’s tariffs.