- Summary:
- Silver price momentum is threatened by US and China drawing near to initiating trade talks, but some support stays on.
Silver price extended its decline on Monday, going down by 0.1% to trade at $33.05 in the European session. The decline is founded on the improving sentiment in the broader financial markets, which has reduced the demand for safe haven assets. Nonetheless, the momentum underlying silver price is still bullish-leaning, with the greyish metal up by 14.4% year-tot-date and having gained 1.1% in the last five sessions.
The commodity is likely stay subdued as the US hints at exploring trade talks with China. Multiple news sources reported last week that China was considering exempting certain US goods from its 125% tariffs imposed on US goods. While the exact list of goods is yet to come out, such a move could potentially see the Trump administration soften its stance on China and initiate steps to lowering US 145% tariffs.
China has downplayed recent claims by the US that the two nations were actively working on resolving the trade impasse. On Monday, China’s Foreign Affairs Ministry denied a Times magazine interview in which Trump had claimed that he had recently held a phone call with his Chinese counterpart Xi Jinping. These developments point to an existential global economic risk will likely provide support to silver price in the near-term.
In the medium-term, the Federal Reserve’s interest rate decision on May 7 could be the most consequential yet under the Trump administration. An adjustment of the current 4.25%-4.50% rate could inject substantial volatility into XAGUSD pair.
Silver Price Prediction
The momentum on silver price signals control by the sellers if resistance persists at $33.11. The metal will likely find initial support at $32.91. The momentum could break below that level if the sellers extend their control. However, an extended control by the sellers could send the price lower and test the second support at $32.75.
Alternatively, breaking above $33.11 will will signal the onset of bullishness. If that happens, the coin will likely encounter the first hurdle at $33.26. However, a stronger momentum will go above that level, and the downside narrative will be invalid at that point. Furthermore, such momentum could extend gains to test $33.47.
