HG MARKETS:

Silver prices are drifting lower early Friday, marking a third consecutive daily decline after hitting a 14-year high of $39.53 earlier this week. The metal is currently trading in a short-term range between $37.50 and $39.53, with $38.51 acting as a key pivot level. Market participants are closely watching price behavior around this midpoint, as it may determine silver’s near-term direction amid a balance between safe-haven interest and growing risk appetite.

Investor demand for safe-haven assets like silver and gold has waned due to stronger U.S. equities and easing global trade tensions. Recent developments, including a trade agreement with Japan and ongoing negotiations with the European Union over a possible 15% baseline tariff, have improved market sentiment. Analysts, point to low volatility and solid equity market performance as factors weighing on precious metals demand.

Economic data from the U.S. further supported a risk-on tone. Weekly jobless claims came in better than expected at 217,000 for the week ending July 19, suggesting a resilient labor market. This lifted the 10-year Treasury yield to 4.402%, reinforcing investor confidence. However, mixed signals from weak new home sales and uneven PMI results have added caution to the otherwise optimistic economic outlook.

Uncertainty around U.S. monetary policy grew after President Trump made an unexpected visit to the Federal Reserve on Thursday, his first while in office. During the visit, Trump again criticized Chair Jerome Powell’s leadership and pushed for lower interest rates, raising concerns about political interference. Although no change is anticipated in next week’s Fed meeting, Trump’s pressure introduces uncertainty about future rate moves, with potential cuts later in the year seen as supportive for silver prices.

Concerns about upcoming U.S. tariff policies have added to market volatility. While silver is not directly targeted, Trump’s proposed 50% tariffs on copper imports starting August 1 have disrupted industrial metals markets. These developments have led to tightness in the U.S. silver spot market, increasing the premium over London benchmarks and driving up lease rates, which helped push silver to its recent high.

So far in 2025, silver has surged 36%, outpacing gold’s 31% gain. Analysts credit the rally to a combination of strong industrial demand, persistent investor interest, and silver’s comparative affordability. With a structural supply deficit persisting for the fifth consecutive year, physical tightness continues to support bullish momentum in the silver market.