Will the industrial metals rally persist with US-China tariff negotiations potentially on the horizon?

It’s been an eventful week for metal trading enthusiasts as silver and copper prices ride a wave of optimism fueled by shifting trade policies and steady industrial demand. On the one hand, investors are comfortable with the Federal Reserve’s decision to keep rates unchanged. 

Conversely, a temporary pause on some US tariffs, along with hints that China may be open to talks, injected fresh hope into markets worried about a global slowdown.

Silver price outlook: Inflation worries and steady demand

Silver is holding around $31.00, buoyed by its appeal as a safe-haven asset and as a crucial component in industries ranging from electric vehicles to solar panels. Even with the Fed highlighting ongoing inflation concerns, policymakers decided to hold rates steady for now, giving silver some breathing room to consolidate recent gains. 

Analysts also point out that consumer electronics are rapidly evolving thanks to advances in artificial intelligence, offering another boost to silver’s industrial demand outlook.

Recent chatter about a possible recession has eased a bit after Goldman Sachs withdrew its prediction, citing President Trump’s 90-day tariff pause on nations that chose not to retaliate. Nevertheless, others remain cautious, warning that a US economic downturn could still be on the horizon. If those fears materialise, investor demand for silver could climb even higher, given its traditional reputation as a haven in turbulent times.

Copper market analysis: US-China tariff risk remains

Copper, meanwhile, has been on a wild ride. Prices took a sharp tumble on 4 April, plummeting 7.7% before bouncing back to about $8,735 a ton on the London Metal Exchange. 

Market watchers at Citi and BNP Paribas continue to warn that the global trade shake-up could spark a historic correction, but that hasn’t stopped copper from showing signs of resilience.

China’s plan to impose a 34% tariff on US imports rattled markets, contributing to a dip in copper stocks. Multiple countries, including China, hint at a willingness to negotiate with the US. While that’s a promising development, it doesn’t wipe away concerns about slower global growth. UBS has noted that a 1% drop in US GDP might slash output in key Asian economies by as much as 2%, underscoring how interconnected the world’s supply chains are.

Still, the 90-day pause on new tariffs suggests there’s room for more constructive talks. According to analysts, revived manufacturing activity and infrastructure spending could give copper demand another jolt if negotiators strike meaningful deals. Conversely, any breakdown in talks or sudden policy reversals could send the market on another rollercoaster ride.

For now, both silver and copper stand at a crossroads. Investors seem cautiously upbeat about the potential for trade peace and a steady hand from the Fed. Only time will tell whether cooler heads will prevail, but it’s safe to say the spotlight will remain on these two metals for a while yet.

Technical trading outlook: Will Silver and Copper continue upward?

Both industrial metals have seen an uptick in prices at the time of writing. Silver is seeing some upward pressure as it inches towards 31.240, with prices also looking to exceed the moving average. Should prices decisively tower above the moving average, the overall is likely beginning to turn bullish. Key levels to watch on the upside are $32.00 and $33.00. If prices slide, the potential support floor is $29.65.

Copper is also inching up, with the price currently touching an important support and resistance level. Though the current uptick is quite significant, prices remaining below the moving average suggest that the overall trend is still bearish. The key levels to watch on the upside are $8,986 and $9,250. Should prices slide, a potential price floor would be the $8,750 price level.

You can speculate on the price trajectory of these industrials with a Deriv MT5 or Deriv X account.