Silver Price: XAG/USD reaches fresh 14-year highs near $39.00

LONDON (July 14) Silver price (XAG/USD) extends its three-day winning streak, marking fresh highs since September 2011 and trading around $39.00 per troy ounce during the European hours on Monday. The price of the safe-haven metal rises amid dampening market sentiment, driven by the new tariff concerns.

US President Donald Trump announced, on Saturday, a 30% tariff on imports from the European Union (EU) and Mexico starting August 1. Trump also proposed a blanket tariff rate of 15%-20% on other trading partners, an increase from the current 10% baseline rate.

However, the European Union announced on Sunday that it will extend its pause on retaliatory measures against US tariffs until early August, in hopes of reaching a negotiated agreement. Reports also indicated that the EU has initiated discussions with other countries hit by the tariffs, including Canada and Japan, to explore coordinated responses.

Silver prices gains ground as traders adopt caution ahead of key US inflation data this week, which could offer fresh impetus on the broader economic impact of the new tariffs. Additionally, market sentiment turned cautious following remarks from US economic adviser Kevin Hassett, who suggested that Trump could remove Federal Reserve (Fed) Chair Jerome Powell "if there's cause." Traders are now anticipating a little more than 50 basis points of Fed rate cuts by the end of the year.

However, the upside of the Silver price could be restrained as Chinese Trade Surplus narrowed in June. The country’s Trade Balance arrived at CNY585.96 billion for June, down from CNY 743.56 billion previously. This is important to note that Silver plays a crucial role in industrial applications such as electronics, solar panels, and automotive components. As one of the world’s largest manufacturing hubs, China’s industrial demand for Silver is substantial.

FXStreet