Silver Price Forecast: XAG/USD plunges near $30 on delay in Trump’s tariff hike plans

  • The price of Silver plummets near $30.00 as US President Trump delays tariff increases.
  • A delay in Trump’s tariff plans and hopes of a truce between Russia and Ukraine have lifted market sentiment.
  • The Fed is widely expected to keep interest rates unchanged on Wednesday.

The price of Silver (XAG/USD) falls almost 1.75% to near $30.00 in North American trading hours on Thursday. The white metal has been hit hard as overall market sentiment has largely stabilized. Market sentiment has turned favorable for perceived risky assets as United States (US) President Donald Trump has yet to impose tariff hikes, while he was expected to do so on the first day of his inauguration. mandate.

Donald Trump has commented that he is considering tariff increases of 25% on Mexico and Canada and 10% on China that will come into effect from February 1. His presidential memo also suggested the tariffs won’t come quickly, and ordered federal agencies to study trade policies and evaluate trade relationships. The lack of a concrete announcement of tariff increases has eased the risk-averse mood, as market participants expect the implementation of Trump’s tariff policy to be more gradual than feared.

Aside from rising expectations that Russia could have a truce with Ukraine, it has also reduced the risk premium for precious metals. Trump has threatened to impose sanctions on Russia if the war with Ukraine continues.

Historically, safe haven demand for precious metals, such as Silver, declines in a stable risk environment.

Meanwhile, the US Dollar Index (DXY), which tracks the value of the greenback against six major currencies, is trading moderately after gaining ground after refreshing the two-week low of 107.75. The US Dollar (USD) is expected to remain largely sideways, with investors awaiting the Federal Reserve’s (Fed) monetary policy decision on Wednesday. The Fed will almost certainly announce a pause in the current streak of policy easing and keep interest rates unchanged in the 4.25%-4.50% range.

Silver technical analysis

Silver price pulls back near the 20-day EMA around $30.25 after failing to break above the ascending trend line around $30.90, which is drawn from the February 29 low 2024 of $22.30 on a daily time frame.

The overall silver price outlook remains firm above the 200-day EMA, which is trading around $29.50.

The 14-day Relative Strength Index (RSI) is oscillating in the range of 40.00-60.00, suggesting a sideways trend.

Silver daily chart

Source: Fx Street

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