Silver prices (XAG/USD) have risen for the third straight session, reaching approximately $32.90 per troy ounce during Asian trading on Monday. This follows news of Pan American Silver’s acquisition of MAG Silver Corp, valued at about $2.1 billion.

This deal provides Pan American Silver access to a 44% stake in the Juanicipio Silver mine in Mexico. The transaction has been approved by both companies and is set to close in late 2025.

Geopolitical tensions contribute to Silver’s appeal as a safe-haven asset. India and Pakistan continue to experience tension, and Ukraine’s call for a ceasefire with Russia was dismissed by Moscow.

However, Silver’s upward trajectory might be restricted due to the easing of safe-haven demand. Positive US-China trade discussions have buoyed optimism, with formal negotiations planned and progress reported by both sides.

The Federal Reserve’s emphasis on inflation and labour market risks further affects Silver prices. Federal Reserve Chair Jerome Powell ruled out preemptive rate cuts despite economic concerns linked to tariffs.

Silver attracts interest as a historical store of value and a medium of exchange. Its price is influenced by geopolitical instability, interest rates, the US Dollar’s strength, and industrial demand.

The recent upswing in silver to just shy of the $33 per troy ounce mark reflects a sharp acceleration in short-term momentum, not merely supported by geopolitical unease but further reinforced by real corporate movement in the sector. The acquisition by Pan American, acquiring nearly half of the key Mexican asset, should not be interpreted as a one-off transaction. We’re watching a business align itself more tightly with physical reserves, a move that tends to underpin market confidence in tangible backing.

That said, we can’t ignore the more buoyant trade rhetoric emerging from the US and China. There’s reason to believe that if formalised agreements gather pace, much of the fear premium priced into precious metals like silver may soften. This makes it less likely we’ll see overly aggressive upside without a fresh trigger. Recent high-level comments about progress should temper any aggressive positioning aimed at hedging outright risk, particularly as newsflow stabilises rather than escalates.

From a monetary standpoint, Powell’s comments last week hold weight. His refusal to bow to pressure for preemptive easing tells us inflation remains far from tamed in central bank eyes. Whether markets agree or not is another matter, but for traders of derivatives, it’s the implied forward curve and rate expectations that count. Any surprises in economic data that tie Powell’s hands could trigger exaggerated market responses, given current speculative longs.

Meanwhile, the dollar hasn’t weakened persistently, which suggests the metal’s rally may have found more legs from temporary safe-haven flows and repositioning around global events. The dollar’s resilience, for now at least, implies commodity-linked currencies continue to face headwinds. Silver, priced in dollars, walks a tightrope when the greenback firms, acting both as a brake and a rebalancer when moves become overextended.

Positioning shows an increase in futures interest, but not at panic levels. This isn’t a full chase higher; it’s more like cautious reallocation, possibly encouraged by anticipation of tighter supply. The industrial side of demand hasn’t shifted dramatically just yet, though if manufacturing data in Asia and Europe begin to firm further into the summer months, physical consumption could finally meet speculative enthusiasm.

In the near term, it’s going to come down to how convincing the recovery narratives in global manufacturing hold up. Watch to see if forward-looking PMI numbers improve into June. If they disappoint, silver’s industrial credentials take a back seat.

It’s not useful to expect a one-way move. Price swings are being shaped by contrasting themes—real-world tension vs economic normalisation, speculative appetite vs foundational fundamentals. We are tracking each with equal attention.

Keep an eye on real interest rates, not just nominal ones. Rising real yields, especially in the US, tend to pressure non-yielding assets like silver. If inflation data stays firm without a proportional rise in wage growth, suppression of real yields could become a factor again.

Timing will be key; macro news flow tends to front-run broader sentiment. Adjust sizing if volatility increases on headline risk. Reassess hedge weighting if forward guidance from the Fed begins to show cracks or becomes internally inconsistent.