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- Silver price bounces back to near $52.30 after a sharp corrective move on Friday.
- Easing US-China trade tensions diminishes demand for safe-haven assets.
- Traders see a slight chance that the Fed could reduce interest rates by more than 50 bps in the remaining year.
Silver price (XAG/USD) trades 0.7% higher to near $52.30 during the late Asian trading session on Monday. The white metal rebounds after a steep corrective move seen on Friday from the all-time high of $54.50.
The precious metal faced intense selling pressure after comments from United States (US) President Donald Trump signaling that the additional 100% tariffs announced on imports from Beijing won’t last long. “High tariffs were not sustainable, though they could stand,” Trump said, Fox Business reported.
Signs of easing global trade tensions diminish the appeal of safe-haven assets, such as Silver.
Trade frictions between the US and China stemmed after Beijing announced export controls on rare earth minerals.
For major updates on US-China trade relations, investors will focus on the meeting between US President Trump and Chinese leader Xi Jinping, which is scheduled later this month at the Asia-Pacific Economic Cooperation meeting in South Korea. Before that, US Treasury Secretary Scott Bessent is scheduled to meet his Chinese counterpart, Vice Premier He Lifeng, later this week.
Meanwhile, firm expectations that the Federal Reserve (Fed) will reduce interest rates atleast by 50 basis points (bps) in the remaining year will keep the Silver price on the front foot. Lower interest rates by the Fed bode well for non-yielding assets, such as Silver.
According to the CME FedWatch tool, traders have almost priced in atleast 50-basis-points (bps) reduction in interest rates in the remaining year and see a 4.8% chance that the Fed could cut borrowing rates by 75 bps.
Silver technical analysis
Silver price retraces from the all-time high of around $54.50 posted on Friday. However, the near-term trend remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher, which trades around $49.00.
The 14-day Relative Strength Index (RSI) oscillates above 60.00, suggesting that a strong bullish momentum remains intact.
Looking down the 20-day EMA would remain a key support. On the upside, the all-time high of $54.50 might act as key barrier.
Silver daily chart
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