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12/11/24
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Silver Prices Decline as Market Shifts Towards Riskier Assets Post-Trump Victory
Silver prices are encountering significant challenges, primarily driven by a waning demand for safe-haven assets following the recent election victory of Donald Trump. As market participants begin to evaluate the implications of proposed fiscal and monetary policies, there’s a noticeable shift towards riskier assets. This transition has contributed to a decline in silver’s appeal, resulting in a third consecutive day of price drops, with current trading levels around $30.60 per troy ounce during the Asian session.
The value of silver, often viewed as a refuge during uncertain times, is increasingly pressured by the strengthening of the US Dollar and heightened Treasury yields. The US Dollar Index, which measures the dollar against a basket of six major currencies, is currently near a four-month peak at 105.70. Concurrently, yields on both 2-year and 10-year US Treasury bonds have risen to 4.28% and 4.32%, respectively, further pressuring dollar-denominated commodities like silver.
Furthermore, recent economic indicators from China have disappointed investors, dampening prospects for industrial demand and adversely affecting silver’s outlook. As the world’s largest manufacturing center, China has unveiled a substantial debt package aimed at easing local government financing challenges, but it has lacked direct economic stimulus measures that many had anticipated. This has negative repercussions for industrial metals, including silver, which plays a critical role in industries like electrification and solar energy.
In the solar panel sector, manufacturers tied to China are already scaling back production amid fears that new tariffs could be enacted by the Trump administration. Analysts have suggested that tariffs as high as 60% on Chinese imports could be instituted, further complicating the market dynamics for silver and related industrial metals. Overall, the intersection of these factors suggests a challenging environment ahead for silver prices.
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