Silver prices rose in European trade on Monday, resuming gains and approaching four-week highs on strong buying momentum as the dollar weakened. 

It comes amid strong demand on the white metal, especially due to retail demand as traders notice how silver remains vastly undervalued compared to gold.

Prices

Silver prices rose 1% today to $32.48 an ounce, with a session-low at $31.92.

Silver lost 0.6% on Friday, the first loss in three days on profit-taking away from a four-month high at $33.40.

Silver rose 1.1% last week, marking the fourth weekly profit in a row on strong haven demand.

The Dollar

The dollar index fell 0.15% on Monday on track for the third loss in a row, and about to pierce two-month lows at 106.57 against a basket of major rivals.

A weaker dollar makes the greenback-denominated silver futures cheaper to holders of other currencies.

The decline comes as concerns about global trade receded as US President Donald Trump held off his plans to impose reciprocal tariffs.

US Rates

US retail sales missed expectations completely in January, in another sign of slower growth in the first quarter.

According to the Fedwatch tool, the odds of a Fed March interest rate cut rose mildly from 2.5% to 5%.

Now investors await more data and remarks from Fed officials to gauge the likelihood of upcoming rate cuts.

Retail Demand 

As retailers seek assets to safeguard against risks due to changing monetary policies by global central banks towards quantitative easing, it looks like silver is becoming a favorite.

The white metal is far from its record highs, which gives it a lot of room to grow and rise, especially as gold prices hit record highs recently at $2906 on February 10.

Gold prices rose in European trade on Monday, resuming gains and trading once more above $2900 near record highs as the dollar weakens against major rivals. 

Recent weak US data raised doubts about the flexibility of the US economy and renewed hopes for a Fed rate cut this year.

Prices

Gold prices rose 0.85% today to $2906 an ounce, with a session-low at $2878.

On Friday, gold prices fell 1.55%, marking the heftiest loss in 2025 on profit-taking away from record highs at $2942.

The precious metal rallied 0.75% last week, marking the seventh weekly profit in a row, and the longest such streak since June 2020 on haven demand.

US Dollar

The dollar index fell 0.15% on Monday on track for the third loss in a row, and about to pierce two-month lows at 106.57 against a basket of major rivals.

A weaker dollar makes the greenback-denominated gold futures cheaper to holders of other currencies.

The decline comes as concerns about global trade receded as US President Donald Trump held off his plans to impose reciprocal tariffs.

US Rates

US retail sales missed expectations completely in January, in another sign of slower growth in the first quarter.

According to the Fedwatch tool, the odds of a Fed March interest rate cut rose mildly from 2.5% to 5%.

Now investors await more data and remarks from Fed officials to gauge the likelihood of upcoming rate cuts.

SPDR

Gold holdings at the SPDR Gold Trust fell 1.14 tons on Friday to a total of 863.06 tons, the lowest since January 28.

Euro rose in European trade on Monday against a basket of major rivals, maintaining gains for the fifth straight session against the dollar and about to hit a two-week high on a positive outlook for the eurozone economy.

It comes amid reports about talks in Saudi Arabia to end the Russian-Ukrainian war, while US President Donald Trump decided to put off the implementation of his reciprocal tariff program. 

The Price

The EUR/USD rose 0.2% today to $1.0506, with a session-low at $1.0483.

The pair closed up 0.25% on Friday, marking the fourth profit in a row, and hitting a two-week high at $1.0514 following weak US data.

The pair rose 1.6% last week, marking the first weekly profit in three weeks on hopes for an end to the Russian-Ukrainian war.

Economic Risks Recede

Sources indicate that officials from Russia and the US will meet in Saudi Arabia to discuss a potential end to the war in Ukraine. 

Such talks will likely lead to a summit between President Donald Trump and President Putin later down the line. 

Recently, Putin expressed openness for peace talks with Ukraine, and lauded the good relations with the Saudi mediators, and the importance of building on previous agreements achieved in Istanbul. 

No doubt, an end to the Ukrainian war would boost sentiment and stabilize energy prices and could reduce inflation.

Trump’s Tariffs

The global markets are relieved that US President Trump hasn’t yet implemented his reciprocal tariff plan, with his trade officials indicating each country will be dealt with separately. 

The Japanese yen rushed to one-week highs on Monday against the dollar, expanding the gains for the third straight session on strong investor demand. 

Recent data showed Japan’s fourth quarter GDP growth accelerated, in turn raising pressure on Bank of Japan policymakers and boosting the odds of a Japanese rate hike in March.

The Price

The USD/JPY pair fell 0.45% today to 151.50 yen per dollar, the lowest since February 10, with a session-high at 152.38.

The yen closed up 0.35% on Friday against the dollar as US treasury yields dropped.

The yen lost 0.6% last week against the dollar, marking the first weekly loss in five weeks, moving away from two-month highs.

Japan’s GDP

Official data showed Japan’s GDP growth at 0.7% in the fourth quarter of 2024, easily beating estimates of a 0.3% rise, and up sharply from a 0.3% growth rate in the third quarter.

Japanese Rates

Following the data, the odds of a Bank of Japan 0.25% interest rate hike at the March meeting rose from 75% to 80%.

Now traders await more data on Japan’s inflation, unemployment, and wages before the March meeting.

Interest Rate Gap

The US-Japan interest rate gap is standing at 400 basis points in favor of the US, and any signs of a reduction in the gap would boost the standing of the yen.