On Monday (January 20th), as President Trump is about to take office, traders are closely monitoring signals of how his agenda will affect silver prices. Policies targeting trade, manufacturing, renewable energy, and inflation may drive significant changes in industrial demand and hedging positioning. China plays a central role in global silver consumption, and Trump's US China trade-related policies may become a decisive factor in shaping the market.

The threat of trade policies to industrial demand

Trump may impose tariffs or other trade restrictions on Chinese goods, which could weaken silver demand in key industries such as electronics and solar panel manufacturing. Analysts from ING and JPMorgan have warned that if China's manufacturing output decreases, especially in silver intensive industries, it could put bearish pressure on silver prices. However, any measures to stimulate domestic manufacturing in the United States can offset this decline by creating new sources of demand.

Renewable energy: Silver demand in the solar energy industry is precarious

Trump's stance on renewable energy may determine the demand for silver in the solar industry, which accounts for a large proportion of industrial consumption. Industry experts from the International Energy Agency emphasize that given the United States' role in promoting innovation and installation, its solar incentive policies have global implications. If renewable energy subsidies are cancelled, it will be detrimental to the trend of silver, as the production of photovoltaic cells heavily relies on silver. On the other hand, a sudden shift towards green energy will trigger a bullish trend.

Inflation policy may support safe haven demand

Trump's tax cuts and infrastructure spending plans may trigger inflationary pressures, thereby weakening the US dollar. Goldman Sachs economists point out that the weakening of the US dollar makes silver more attractive as a hedging tool and may push up silver prices. In addition, the geopolitical risks brought about by more aggressive foreign policies may enhance the attractiveness of silver as a safe haven asset, as emphasized by strategists at UBS and Bank of America.

Market outlook: Preparing for volatility, mixed signals

The silver market outlook is neutral in the near future, but it may become a catalyst for both bearish and bullish trends. If trade policies move in an unfavorable direction, industrial demand may decline, causing downward pressure on silver. However, fiscal stimulus and inflationary trends may provide support, especially in the context of escalating geopolitical tensions. Traders should be cautious in building positions and observe clear signals regarding trade policies and renewable energy initiatives. If inflation rises and the US dollar weakens, it is expected to create a more bullish environment.