Silver Edges Up on Weaker US Dollar

Silver made its biggest gains in two weeks on Thursday morning (September 20) after the US dollar took a hit on the back of a variety of ongoing geopolitical concerns.

The upswing has investors hopeful, but cautious, as it was just last week that the white metal dropped below US$14 per ounce, falling to its lowest level in 2.5 years.

“There’s been a lot of people that have given up on the silver market and that is verified by the amount of retail sales in silver,” David Morgan of the Morgan Report told the Investing News Network when asked about the current state of silver.

Christopher Lewis of FXEmpire also weighed in on the current state of silver prices, stating, “[silver] markets continue to grind higher during the day on Wednesday, reaching towards the US$14.30 level, the beginning of significant resistance. That resistance can be seen as reaching towards the US$14.35 level, so I think there is a high likelihood that the sellers could return.”

While investors react to the relaxation in Sino-US trade tensions, the white metal’s price was supported by a weaker greenback. The US dollar hit a nine-week low against a basket of major currencies and ongoing US and Chinese tariffs on reciprocal imports worked in silver’s favor.

“America is killing itself with these trade tariffs. [They] actually hit America far harder than [they] hit China. The idea that the dollar is all mighty and going to continue to rise is not true,” said Alasdair Macleod, head of research at GoldMoney.com.

This has given a boost to silver demand due to the fact that much like gold, a down dollar means an up precious metal.

As the tariff tit-for-tat continues on between the US and China, investors are starting to realize that it may be worse for the US economy than originally perceived and this may have them running towards safe-haven assets, such as precious metals, more frequently than in the last quarter.

In fact, insiders believe that if today’s gains are any indication on how the tariffs will effect the greenback, silver could be in a solid position to continue its climb.

“Remember, the US dollar has a major part to play in the way the silver markets behave. Right now, there are a lot of concerns around the world, so that of course has people dumping precious metals over the longer-term,” Lewis noted, adding that the market is at historically cheap levels. 

“I think that will be one of the reason you should be paying attention to buying physical silver as it’s a great longer-term investment,” he said.

As of 3:06 p.m. EST, silver was up 0.32 percent, trading at US$14.27 per ounce.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.  

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