Silver Sees Brief Respite Amid Ongoing Fed Headwinds

Silver prices saw a brief reprieve at the end of last week, closing out the trading period at $64.71 per troy ounce after a daily gain of 0.7%. This uptick came as a result of the Washington trade talks between the US and China, where both sides agreed to extend their existing trade agreements and discussed regulatory frameworks for artificial intelligence.

The meeting was closely watched by commodity traders due to silver's dual identity as both a store of value and an industrial input. Its demand profile is increasingly tied to AI hardware and solar panel manufacturing, making it vulnerable to export controls or new tariffs on related technology.

Despite this positive development, the broader market remains challenging for silver investors. The metal sits just below its 50-day moving average of $65.06, indicating a consolidation phase following recent turbulence.

The Federal Reserve's decision to raise interest rates roughly a week ago continues to weigh on sentiment, causing silver to shed around 1.5% since then. Rising yields on competing assets erode the appeal of silver, which pays no coupon, and persistent inflation worries tied to the energy sector add to the nervousness.

However, not all analysts are bearish on silver's prospects. UBS strategist Dominic Schnider projects that silver will climb to $70 per ounce by December 2026, with further gains expected in subsequent years.