Silver Outshines Gold As Wall Street Stages Midweek Recovery

 

Silver Outshines Gold As Wall Street Stages Midweek Recovery

(Bullion News Network) – Silver prices jumped this morning, climbing nearly 2.3% and logging the precious metal’s third consecutive day in the green. Gold prices moved sideways on the day, adding around $2.50 per ounce to its spot price before market close. This lopsided price action drove the gold-silver ratio down 1.88 points to 89.13:1, the first dip below 90:1 since February 20th of this year. Both precious metals are up on the week, buoyed by a growing sense of uncertainty in the wake of President Trump’s tariffs on Canada and Mexico, which went into effect at midnight on Tuesday. Wall Street retreated on Tuesday as traders reacted to the new tariffs, which economists say run the risk of raising prices for consumers and stimulating a costly trade war.

Wall Street staged a midweek recovery on Wednesday after President Trump announced a temporary tariff exemption for car manufacturers. The tariff relief will last one month and is intended to prevent a large increase to the cost of buying vehicles, many of which are imported from Canada and Mexico. Both the Dow and S&P 500 surged amid heightened hopes that the president might be open to negotiating some of the import fees levied against China, Mexico, and Canada. Wall Street’s gains were understandably highest in the automotive sector, with Ford and General Motors surging 5% and 7% in the hours following the news. According to White House Press Secretary Karoline Leavitt, President Trump is willing to consider adding more exemptions to the sweeping tariffs on America’s North American allies. 

Volatility and uncertainty have driven gold’s price run throughout the first quarter of 2025, so it is not surprising that prices moved sideways once Wall Street staged a moderate recovery. The precious metal still remains within striking distance of a fresh all-time high and rests $22 above the $2,900 support level. Silver is less than $0.20 below its 2025 high of $32.96 per troy ounce. A weaker dollar and concerns that the U.S. may find itself in a series of costly trade wars drove heightened demand for the precious metal today as Wall Street recovered following Tuesday’s sell-off. 

Later this week on Friday, job and wage data should give traders a better idea of where the labor market is heading. Analysts project an increase in the number of nonfarm payrolls for February and that the unemployment rate will remain stagnant. Traders will get an early look at the labor market tomorrow when the initial jobless claims report for the month of March becomes public. Economists anticipate a decrease in initial jobless claims from 242,000 in February to 235,000 in March. These data reports will play a key role in the FOMC’s decision when the Fed meets in March. 

CME FedWatch currently projects a 7% probability that the FOMC will opt to cut rates at its March 19th meeting, up from 4% one week ago and down from 17% last month. Speculation concerning the Fed’s interest rate calls drove several of gold’s historic price runs in 2024. A flurry of economic and geopolitical uncertainties will likely complicate the price action equation this year, but analysts expect that safe haven prices will continue to negatively correlate with movements in the federal funds rate. Expect more movement out of gold and silver if this week’s labor market data comes in cooler than expected, which would likely prompt an adjustment in the Fed’s monetary policy approach heading into Q2 2025. 

For now, silver will outshine gold at midweek, adding over 2.3% to its spot price as the yellowish precious metal moves sideways in the face of Wall Street’s growing tariff optimism.