Silver Price Forecast: XAG/USD steadies near $32.00 as safe-haven demand increases

Silver prices edge higher as persistent uncertainty over US-China trade talks drives demand for safe-haven assets.
President Trump confirmed that negotiations are ongoing but noted no talks with Chinese President Xi Jinping are planned this week.
A weaker US Dollar is enhancing the appeal of dollar-denominated assets like silver for foreign investors.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) is pausing its four-day decline, trading near $32.10 during the Asian session on Monday. The precious metal is regaining ground as ongoing uncertainty around US-China trade talks fuels safe-haven demand.

On Friday, China’s Commerce Ministry said it is considering a proposal from the United States (US) to resume trade discussions. This comes after US President Donald Trump stated that negotiations were underway, although he clarified that no talks with Chinese President Xi Jinping are scheduled for this week.

The US Dollar (USD) has also weakened, boosting the appeal of dollar-denominated assets like Silver for holders of other currencies. The Greenback is under pressure, partly due to escalating trade tensions, with Trump announcing plans for a 100% tariff on foreign-produced films.

However, Silver’s industrial demand prospects are clouded by deteriorating global economic data. The US economy unexpectedly contracted by 0.3% in Q1—its first decline in three years—while China’s NBS manufacturing PMI dropped to a 16-month low, driven by the sharpest fall in export orders since 2022.

Market focus now shifts to the upcoming US Federal Reserve policy meeting, where rates are widely expected to remain unchanged despite Trump’s renewed push for a cut. Investors are also watching Monday’s US ISM Services PMI release for insight into the 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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