Spot Silver traded in proximity to a one-week high of $33.93 per troy ounce on Thursday and the US Dollar softened, as fresh US auto tariffs added to global trade tensions, fueling demand for safe haven assets.
Yesterday US President Trump announced a 25% tariff on imported cars and light trucks, which will take effect on April 2nd, along with reciprocal tariffs on countries that imposed levies on US imports.
The US Dollar Index was last down 0.22% to 104.433, easing from a three-week high of 104.683.
According to Swissquote Bank analyst Ipek Ozkardeskaya, the countries’ response to US tariffs will likely determine the US Dollar’s future course.
In case there is a retaliation from US largest trading partners, this may “further hammer U.S. growth prospects and weigh on the dollar.”
A softer US Dollar makes dollar-priced Silver more appealing to investors holding other currencies.
The prospects of more Federal Reserve rate cuts have also supported Silver.
Minneapolis Federal Reserve Bank President Neel Kashkari said that despite the progress on inflation, “we have more work to do” to bring inflation down to the central bank’s 2% target.
Markets are now pricing in two 25 basis point rate cuts for 2025 – one in June and another in September.
Spot Silver was last up 0.43% on the day to trade at $33.78 per troy ounce.
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