Silver can rise further amid increasing trade tensions

Last week, silver fell 2.45%. The precious metal started this week with growth on March 24, opening at 33.022.

The price dynamics were significantly influenced by the news from the US. The country’s central bank decided to hold its base interest rates steady amid persistent trade uncertainty. The decision raised investors’ expectations of a potential monetary easing by the Fed. Experts forecast one quarter percentage point cut by the end of 2025. However, Fed Chairman Jerome Powell signalling no rush to cut rates resulted in a stronger dollar, making it more attractive for investors. The dollar index approached its three-week high, which had a negative impact on the interest in silver, since a stronger dollar makes the precious metal more expensive for buyers. 

The global trade tensions are also affecting the precious metal’s popularity. The introduction of new US tariffs scheduled April 2 raises some concerns among investors, although markets have calmed somewhat thanks to the possible imposition of less stringent trade restrictions. 

However, the concerns over other countries’ retaliation persist. The EU has already announced its readiness to introduce retaliatory measures in case the US imposes trade tariffs on the region’s products. Experts note that the tariffs are likely to lead to rising inflation and decelerating economic growth. 

Additionally, the silver prices are under pressure due to the economic problems of China, which is facing decreasing industrial demand for the precious metal. 

At the same time, the prices are supported by possible restrictions on silver imports in the US, which were announced by the US Secretary of Commerce last week. Analysts believe the market has not yet fully priced in these risks.

As of March 24, the MACD indicator signals a weakening bullish trend. The MACD line shows a decline after reaching a local high on March 20. The MACD histogram remains positive, but is decreasing, which indicates the possibility of the signal line crossing from top to bottom soon and the beginning of the trend reversal. However, further growth is also possible.

The Stochastic oscillator indicates that a correction has occurred in the market. After reaching the overbought zone last week, the market started a correction and is now in the neutral zone.

Current recommendation:

Buy at the current price. Take profit – 34.225. Stop loss – 32.000.