Silver Price Forecast: XAG/USD retreats towards the $33.00 area on risk-on markets
- Silver prices lost ground on a somewhat stronger USD and a mild risk appetite.
- Ongoing concerns about the ballooning US debt might cap US Dollar's gains.
- XAG/USD is likely to find support at the $32.90-33.00 area.
Silver prices (XAG/USD) are dropping beyond 1% on Monday, weighed by a moderately positive market sentiment and a mild US Dollar recovery. Trump’s de-escalation of the tariff rift with Europe has boosted market sentiment, dampening demand for safe assets like precious metals.
The US president delayed a plan to impose 50% tariffs on all Eurozone imports from June 1 after a phone call with EU Commissioner, Ursula von der Leyen. This has calmed investors’ fears about a severe impact on international trade and on the global economic growth prospects.
US debt concerns might limit the Dollar’s recovery
The US Dollar rebound, however, is likely to face resistance amid the growing concerns about the US fiscal health. Last week’s downgrade of the US debt ratings and the impact of a tax-slashing bill have boosted fears of a debt crisis in the US, which fuelled a “Sell America” trade last week.
Trump’s “big, beautiful tax bill”, which will be discussed by the US senate over the coming weeks, is expected to add $3.8 trillion to a $36,2 trillion debt pile over the next years. This is likely to act as a headwind for the US Dollar and keep Silver dips limited.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.27% | 0.13% | 0.40% | 0.09% | 0.48% | 0.47% | 0.29% | |
| EUR | -0.27% | -0.16% | 0.15% | -0.18% | 0.13% | 0.09% | -0.00% | |
| GBP | -0.13% | 0.16% | 0.31% | -0.02% | 0.26% | 0.25% | 0.12% | |
| JPY | -0.40% | -0.15% | -0.31% | -0.31% | 0.06% | -0.03% | -0.13% | |
| CAD | -0.09% | 0.18% | 0.02% | 0.31% | 0.36% | 0.28% | 0.14% | |
| AUD | -0.48% | -0.13% | -0.26% | -0.06% | -0.36% | -0.11% | -0.25% | |
| NZD | -0.47% | -0.09% | -0.25% | 0.03% | -0.28% | 0.11% | -0.17% | |
| CHF | -0.29% | 0.00% | -0.12% | 0.13% | -0.14% | 0.25% | 0.17% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
XAG/USD might find support at the $32.90-33.00 area
From a technical perspective, XAG/USD is going through a choppy consolidation following April’s rally. The pair has been capped at the range top, 33.70, and is likely to test support at the $32.90 zone.
A break of this level would increase pressure towards the May 20 low, $32.15 ahead of the range bottom, at $31.74. Above $33.70, the next resistances are $34.15 and $34.60.
XAG/USD 4-hour chart
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
