Can industrial metals maintain momentum as trade talks evolve?

It’s been quite a ride for metal enthusiasts lately! Silver and copper have been grabbing headlines, thanks partly to the Federal Reserve’s choice to keep interest rates steady, giving investors one less worry. The buzz around a temporary pause on some U.S. tariffs, coupled with hints that China may be open to negotiations, has breathed new life into markets bracing for a potential global slowdown.

Silver’s surge: safe-haven and industrial powerhouse

Silver prices advanced further this week, with spot silver hitting $31.26 intraday. Rising inflation expectations and mounting global economic uncertainty continue to draw investors seeking diversification. Silver’s dual identity- as both a precious metal and a critical component in industries like solar energy and electric vehicles- boosts its appeal during volatile times.

Even though the Fed remains watchful about inflation, it has chosen not to raise rates yet, giving silver extra room to maintain its recent gains. Analysts also point to the rapid evolution of consumer electronics, driven by AI breakthroughs, as another force underpinning silver’s strong demand. And while worries about a U.S. recession have simmered somewhat, they haven’t gone away. Silver’s safe-haven status could draw even more investor interest if concerns about a downturn reappear.

Trade and currency risks reinforce safe-haven sentiment

Despite the momentary tariff pause, underlying tensions persist. The U.S. has a 125% tariff on certain Chinese goods and a 10% base tariff on products from other major trade partners, reigniting fears about slowing global growth. At the same time, the Chinese yuan is trading at multi-year lows, which amplifies gold’s role as a hedge against currency risk.

Central banks continue accumulating gold for their reserves, and market watchers expect ETF inflows to grow if prices stay above key thresholds. Taken together, these developments underscore how metals- both precious and industrial- remain central to investor strategies for balancing risk and reward.

Copper’s rollercoaster: Tariffs, talks, and resilience

The ride has been anything but smooth in the copper market. After a sharp 7.7% drop on April 4, prices bounced back, landing around $8,735 per ton on the London Metal Exchange.

Despite doomsday predictions from big banks like Citi and BNP Paribas about a possible major correction, copper has shown it can still spring back to life.

China’s plan to impose a 34% tariff on U.S. imports initially spooked the market. However, indications that multiple countries in China be open to fresh talks have helped temper some fears. Still, the risk of slower global growth looms large. UBS analysts warn that if U.S. GDP drops by 1%, it could dampen production in key Asian economies by up to 2%, highlighting the interconnectedness of modern supply chains.

On a brighter note, the 90-day pause on additional tariffs might create space for more constructive discussions. If officials seal meaningful agreements, a renewed push in manufacturing and infrastructure spending could increase copper demand. On the flip side, a sudden breakdown or policy reversal could jolt prices once again.

Looking ahead: Balancing hope with real risks

All in all, silver and copper are walking a tightrope right now. The Fed’s patient approach and the possibility of smoother trade relations have fueled recent gains, but plenty of question marks remain. With trade tensions still bubbling beneath the surface and currency risks adding an extra layer of complexity, investors will keep a close eye on negotiations and brace for whatever twists and turns may come next.

Technical trading outlook: Will Silver and Copper continue upward?

Both industrial metals have seen an uptick in prices at the time of writing. Silver is seeing some upward pressure as it inches towards 31.240, with prices also looking to exceed the moving average. Should prices decisively tower above the moving average, the overall is likely to turn bullish. Key levels to watch on the upside are $32.00 and $33.00. If prices slide, the potential support floor is $29.65.

Copper is also inching up, with the price currently touching an important support and resistance level. Though the current uptick is quite significant, prices remaining below the moving average suggest that the overall trend is still bearish. The key levels to watch on the upside are $8,986 and $9,250. Should prices slide, a potential price floor would be the $8,750 price level.