Silver (XAG/USD) continued its three-day uptrend, marking a new high since September 2011 and trading around $39.00 per troy ounce during the European trading session on Monday (July 14). The price of this safe-haven metal rose amidst weakening market sentiment, driven by concerns about new tariffs.

US President Donald Trump announced on Saturday a 30% tariff on imports from the European Union (EU) and Mexico starting August 1. Trump also proposed a blanket tariff of 15%-20% on other trading partners, an increase from the current base rate of 10%.

However, the European Union announced on Sunday that it would extend its pause on retaliatory measures against US tariffs until early August, in hopes of reaching a negotiated agreement. Reports also indicated that the EU has begun discussions with other countries affected by the tariffs, including Canada and Japan, to explore a coordinated response.

Silver prices strengthened as traders remained cautious ahead of key US inflation data this week, which could provide fresh insight into the broader economic impact of new tariffs. Furthermore, market sentiment turned cautious following remarks by US economic adviser Kevin Hassett, who stated that Trump could remove Federal Reserve Chairman Jerome Powell "if there's a reason." Traders are now anticipating a Fed interest rate cut of just over 50 basis points by the end of the year.

However, silver price gains may be tempered by China's narrowing trade surplus in June. The country's trade balance reached CNY585.96 billion in June, down from CNY743.56 billion previously. It's worth noting that silver plays a crucial role in industrial applications such as electronics, solar panels, and automotive components. As one of the world's largest manufacturing hubs, China's industrial demand for silver is substantial. (alg)

Source: FXstreet