08 Jan 2025

• Silver price receives support due to uncertainty over the tariff policy ahead of the Trump administration.
• The industrial demand for Silver strengthens due to a positive economic outlook in China, the world's largest consumer of metals.
• The upside of the dollar-denominated metal could be restrained due to the improved US Dollar.
• Silver price (XAG/USD) continues its upward trend for the fifth consecutive day, currently trading at approximately $30.10 per troy ounce during the Asian trading session on Wednesday. As a safe-haven asset, silver has garnered support amidst the prevailing uncertainty regarding tariff policies in the lead-up to Trump's inauguration. Nevertheless, Trump has refuted a report from the Washington Post that indicated his team was contemplating a more focused approach to his tariff strategy, aimed solely at certain essential imports.
• A favorable economic forecast in China, the leading global consumer of silver, is bolstering demand for the metal. The People's Bank of China (PBoC) is collaborating with the State Planner to invigorate the nation's economy. PBoC official Peng Lifeng has indicated that the central bank will assist financial institutions in increasing loans under the trade-in initiative.
  
  Nevertheless, the price of silver, which is denominated in dollars, may face challenges as a stronger US Dollar (USD) renders it more costly for purchasers using foreign currencies, consequently reducing silver demand. The US Dollar Index (DXY), which assesses the performance of the US Dollar against six major currencies, remains above 108.50 at the time of this report. The Greenback has appreciated as the yield on 10-year US Treasury bonds rose by over 1% in the previous session, currently at 4.68%.
  
  This increase underscores the shifting investor sentiment regarding the Federal Reserve's (Fed) interest rate projections in light of robust US economic indicators. The most recent ISM services report indicated heightened activity and rising prices in the United States, amplifying concerns about ongoing inflation. This situation has further exerted pressure on silver prices, as elevated interest rates typically diminish demand for the non-yielding metal. Traders are now turning their attention to forthcoming US employment data, including the Nonfarm Payroll (NFP) report, as well as the latest FOMC Minutes, for additional insights into policy direction.