Silver Price Forecast: XAG/USD attracts some buyers to near $32.50 ahead of US Retail Sales release
- Silver price extends its upside to around $32.45 in Friday’s Asian session.
- Steady concerns over a global trade war support the Silver price.
- US PPI inflation was higher in January.
Silver price (XAG/USD) trades in positive territory for the third consecutive day near $32.50 during the Asian session on Friday. The growing concerns about US President Donald Trump's tariff policies continue to underpin the white metal. Traders brace for the US Retail Sales for January, which are due later on Friday.
US President Donald Trump promised to target countries that charge tax on US imports by matching them with a reciprocal tariff. Late Thursday, Trump ordered his administration to start study duties by early April, prompting fears of a global trade war, boosting the safe-haven asset like Silver.
Data released by the US Bureau of Labor Statistics on Thursday showed that Producer Price Index (PPI) rose 3.5% YoY in January, compared to a 3.3% increase seen in December. This figure came in above the market expectation of 3.2%. Meanwhile, the annual core PPI rose 3.6% YoY in January versus 3.7% (revised from 3.5%) prior, beating the estimation of 3.3%.
The report strengthened financial market views that the Federal Reserve (Fed) would not be cutting interest rates before the second half of the year. This, in turn, could support the Greenback and weigh on the USD-denominated commodity price.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
