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Rising US trade tensions caused silver to drop, but tariff delays are now boosting its recovery.
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The US dollar’s weakness, linked to inflation data and interest rate expectations, supports silver’s rise.
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As the gold/silver ratio peaks, silver targets $34 and $35.50 per ounce, driven by growing demand.
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Silver, which is used a lot in industries (especially in renewable energy), dropped sharply at the start of the month due to rising tensions in the US trade war with other countries. The main reason for the drop was growing worry about a slowdown in the global economy, especially in the US, where people are starting to talk about a possible recession later this year.
However, silver prices are now bouncing back. This is because some tariffs have been delayed or made less strict—especially for electronics. Prices have already recovered more than half of their earlier losses. If the US Dollar stays under pressure and there are no new surprises in trade policy, silver could fully recover and continue to rise.
The latest inflation data from the US shows that the Consumer Price Index (CPI) is getting closer to the Federal Reserve’s target. This, along with expectations of interest rate cuts happening sooner than expected, is keeping pressure on the US dollar. You can clearly see this in the dollar index, which measures the dollar’s value against a group of other major currencies.
Right now, the technical setup for the dollar is very interesting. The index is testing long-term lows around the 99-point level.
If sellers push the dollar index below this key level, it could open the door for further declines, with the next major target near 95 points—its lowest level since early 2022. This matters a lot for silver since a weaker dollar usually supports higher prices for metals and other commodities.
However, because of slow market activity during the holiday period and fewer major economic updates expected, there is also a good chance the dollar will hold this support level and bounce back above 100 points, at least in the short term.
The gold/silver ratio index reflects the price relationship between gold and silver. At the start of the month, following the announcement of new tariffs, there was a clear upward trend. This shows that gold remains the main asset seen as a safe haven, while silver, being part of many industrial sectors, is less favored in times of economic uncertainty.