Silver Price Forecast: XAG/USD holds losses near $33.00 as demand for metals weakens

Silver price is declining as safe-haven demand for precious metals weakens amid easing trade-war concerns.
President Trump highlighted progress in negotiations and confirmed recent communications with Chinese President Xi Jinping.
Dollar-denominated silver is losing its appeal, with the US Dollar strengthening on growing optimism over improving US-China trade relations.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) is depreciating after registering gains in the previous day, trading around $33.00 per troy ounce during the Asian hours on Tuesday. The safe-haven demand for precious metals, including Silver, continues to weaken as trade-war concerns ease.

At the same time, dollar-denominated Silver loses its appeal, with the strengthening US Dollar (USD) making it more expensive for buyers using other currencies. The USD is gaining support as optimism grows over improving US-China trade relations.

US President Donald Trump recently signaled a willingness to roll back tariffs on China, while Beijing granted exemptions on certain US imports — moves that have fueled hopes for a potential resolution to the prolonged trade conflict between the world’s two largest economies.

US Treasury Secretary Scott Bessent confirmed in an interview with CNBC on Monday that all arms of the US government are actively communicating with China. He noted that many major US trading partners have made "very good" tariff proposals, and China's latest exemptions suggest a readiness to ease tensions.

President Trump also emphasized progress in negotiations and confirmed ongoing dialogue with Chinese President Xi Jinping. Meanwhile, The Wall Street Journal reported that Trump is seeking to reduce the impact of automotive tariffs by preventing overlapping duties on foreign vehicles and lowering tariffs on imported car parts.

Traders are turning their attention to several key US economic reports this week, including the preliminary Q1 GDP reading, March PCE inflation data, and April Nonfarm Payrolls figures. These releases are expected to offer important insights into the Federal Reserve’s potential policy moves and the broader economic outlook.

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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