Silver Price Forecast: XAG/USD trades lower near $33.00 due to US-China trade talks

Silver price edges lower as safe-haven demand wanes amid news of upcoming US-China trade talks.
US Treasury Secretary Bessent and Trade Representative Greer are scheduled to meet Chinese Vice Premier He Lifeng in Geneva.
The Federal Reserve is expected to keep interest rates steady, with markets closely watching Chair Powell’s remarks for policy cues.

Akhtar Faruqui FXStreet

Silver (XAG/USD) retreated on Wednesday during Asian trading hours, hovering around $33.00 per troy ounce after two consecutive days of gains. The decline comes as safe-haven demand weakens following news that US and Chinese officials will meet this week to discuss trade, raising hopes of de-escalation.

In a notable development, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are scheduled to meet Chinese Vice Premier He Lifeng in Geneva over the weekend. This marks the first high-level dialogue since the US imposed tariffs that triggered a global trade conflict. China’s Ministry of Commerce confirmed Beijing's willingness to engage, citing consideration of US proposals, global sentiment, and domestic interests.

The stronger US Dollar is also weighing on dollar-denominated Silver, as investors grow cautious ahead of the Federal Reserve’s (Fed) interest rate decision later in the North American session. A firmer Greenback reduces Silver’s appeal for holders of other currencies.

Earlier gains in Silver had been driven by investor reaction to President Donald Trump’s latest trade remarks. While he ruled out talks with Chinese President Xi Jinping this week, he hinted at a possible rollback of the 145% tariff on Chinese goods. However, his announcement of new 100% tariffs on foreign films and possible levies on pharmaceuticals has added to market uncertainty.

The Federal Reserve is widely expected to leave interest rates unchanged, with markets closely monitoring Chair Jerome Powell’s comments amid ongoing trade-related volatility and pressure from President Trump to cut rates.

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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