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One key driver behind Monday’s muted action was a shift in trade policy expectations. Former President Donald Trump delayed his proposed 50% tariff on EU goods until July 9, dialing back immediate geopolitical risk. While last week’s rhetoric around aggressive tariffs spurred safe-haven flows into gold and silver, the delay reduced urgency in those bids. Trump’s original proposal to escalate from an existing 10% rate had rattled markets, but Sunday’s extension—confirmed after talks with European Commission President Ursula von der Leyen—eased short-term fears.
Fiscal Strain and Dollar Weakness Remain in Focus
Despite the calm start to the week, underlying fundamentals for silver remain strong. Last week’s rally was underpinned by intensifying concerns over U.S. fiscal policy, as the latest tax-and-spending bill is projected to expand the federal deficit by $4 trillion. This, coupled with Moody’s downgrade of U.S. sovereign credit, has amplified safe-haven demand across the board.
The U.S. dollar index saw its steepest weekly loss since April, down 1.35%, as international sentiment turned bearish. Net short positions on the dollar swelled to $17.3 billion. Meanwhile, long-dated Treasury yields climbed sharply, with the 30-year hitting 5.14%, signaling mounting investor concern about inflation and the potential need for Federal Reserve intervention.
Silver Tracks Gold’s Strength as Inflation Hedge
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