Silver jumps to 13-year high on trade tensions

Today’s headlines

What’s happening: Silver prices rose sharply on Friday due to heightened tariff-related concerns.

What happened: Investors bought safe-haven assets after US President Donald Trump announced plans to impose fresh tariffs.

Gold prices also jumped on Trump’s moves and speculations of lower interest rates by yearend.

Why it matters: Global equity markets came under pressure on Friday after Trump announced new tariffs. He slapped a 35% tariff on imports from Canada, starting next month, and announced plans to impose blanket tariffs of 15% or 20% on several other trading partners.

Trump issued a tariff-related letter to Canada and warned of more measures if it retaliates. He also signalled similar actions targeting the European Union.

Last week, the US President announced a 50% tariff on copper imports and a similar tariff on imports from Brazil.

Last week, US Federal Reserve Governor Christopher Waller had indicated another interest rate cut in July. This sparked speculations of interest rates being cut by 50 basis points (bps) by the end of this year.

Non-yielding precious metals generally move higher amid economic uncertainty and during periods of low interest rates.

Strength in the US dollar weighed on precious metal prices as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose to 97.87 on Friday.

US silver futures rose to $38.955 an ounce on Friday, while gold prices jumped 1.4% to settle at $3,371.20 an ounce. Gold extended gains this morning, rising around 0.4%.

In other metals trading, platinum surged to $1,469.9, while palladium settled higher at $1,283.20 and copper prices settled at $5.6045.

Palladium prices rose sharply amid speculations of Trump announcing sanctions on Russia.

What to watch: Investors will continue monitoring tariff-related news from the US, which is expected to impact metal prices ahead.

Data on inflation rate from the US, due to be released on Tuesday, will also remain in focus. The annual inflation rate in the US, which rose for the first time in four months to 2.4% in May from 2.3% in April, is expected to accelerate further to 2.6% in June.

The markets today

European stocks in focus today ahead of some major economic data this week

Context: Equity markets in the Eurozone closed lower on Friday amid renewed trade tensions.

Details: Investors continued monitoring tariff-related news from the Trump administration after the US President announced plans to impose a 35% tariff on imports from Canada effective August 1.

On Saturday, Trump announced plans to impose a 30% tariff on goods imported from the European Union and Mexico starting August 1. He cited drug trafficking issues in Mexico and persistent trade imbalances with the European Union as reasons for higher tariffs.

Meanwhile, European Commission President Ursula von der Leyen announced a delay in retaliatory tariffs on US goods.

Brunello Cucinelli’s shares edged lower after the company reported a 10.7% surge in revenues for the first half.

The STOXX Europe 600 Index dipped 1.01% to close at 547.34 on Friday. Despite recording sharp losses on Friday, the index ended the week in black.

London’s FTSE 100 fell 0.38% to close at 8,941.12, while Germany’s DAX 40 lost 0.82% and France’s CAC 40 fell 0.92%.

What to watch: Investors await the release of economic data on industrial production (1300 UAE Time) and ZEW economic sentiment index (1300 UAE Time) from the Eurozone on Tuesday. Eurozone’s industrial production, which contracted by 2.4% in April after 2.4% growth in March, is expected to rise by 0.6% in May. Analysts expect the ZEW Indicator of Economic Sentiment for the Eurozone to improve to 37.8 points in July, from 35.3 in the previous month.

Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.63%, 0.33% and 0.21%, respectively.

The news shaping the markets

US President Donald Trump announced plans to send Patriot air defence missiles to Ukraine to help defend the country against Russia. The news sent the RUB/USD pair lower in forex trading this morning.

UK reached an agreement with Vietnam to remove barriers for the sale of pharmaceuticals, lending support to the GBP/USD forex pair.

Japan’s core machinery orders declined 0.6% to ¥913.5 billion in May, following a sharper plunge of 9.1% in the previous month, which sent the JPY/USD pair higher in forex trading this morning.

New Zealand’s total electronic card spending declined 0.4% year-over-year in June, following a 0.1% fall in the previous month, which exerted pressure on the NZD/USD forex pair.

Singapore’s economy grew by 4.3% year-over-year in the second quarter compared to a revised 4.1% gain in the previous quarter. However, the SGD/USD pair fell in forex trading this morning.

What else to watch today

Germany’s 12-month Bubill auction (1330 UAE Time), Eurozone’s 2028 EU-Bonds auction (1345 UAE Time), 2034 EU-Bonds auction (1345 UAE Time) and 2054 EU-Bonds auction (1345 UAE Time), India’s inflation rate (1430 UAE Time), Brazil’s IBC-BR economic activity (1600 UAE Time), Canada’s wholesale sales (1630 UAE Time), US 3-month Bill auction (1930 UAE Time) and 6-month Bill auction (1930 UAE Time), as well as Argentina’s inflation rate (2300 UAE Time).