Silver price (XAG/USD) extends its upside to around $33.90, its highest level since October 30, 2024, during the Asian trading hours on Tuesday, bolstered by the weaker US Dollar (USD).
The escalating geopolitical tensions in the Middle East, economic uncertainty and growing industrial demand provide some support to the white metal.
The mounting fears of a recession in the United States (US) and persistent uncertainty over trade relations weigh on investor sentiment, boosting safe-haven assets like Silver. Late Monday, US President Donald Trump said that he would be imposing both broad reciprocal tariffs and additional sector-specific tariffs on April 2. Trump has already imposed a 20% tariff rate in China and a 25% levy on steel and aluminum. He also announced a 25% tariff on Canadian and Mexican goods.
Additionally, the rising geopolitical risks in the Middle East contribute to the Silver price's upside. Israeli Prime Minister Benjamin Netanyahu said on Tuesday that Israel resumes military operations against Hamas across the Gaza Strip, adding that the country will act against the militant group with increasing military force.
Supply deficits and growing industrial demand create a strong tailwind for the white metal. According to the global investment company WisdomTree, investors own a significant portion of it and expect higher prices to encourage sales.
Silver's industrial demand has reached all-time highs, owing to its use in photovoltaic applications, 5G technology, and automotive electronics.
Source: FXStreet
