Silver Price Forecast: XAG/USD rises to near $33.00 on M&A news, geopolitical tensions

• Silver price found support following news that Canadian mining company Pan American Silver plans to acquire MAG Silver Corp.

• Ongoing geopolitical tensions also underpinned the metal, as India issued a warning to Pakistan over recent ceasefire violations.

• Silver gains may be limited by a decline in safe-haven demand, driven by growing optimism around US-China trade talks.

Silver price (XAG/USD) is extending its gains for the third consecutive session, trading around $32.90 per troy ounce during Asian hours on Monday. The precious metal drew support from news that Canadian miner Pan American Silver will acquire MAG Silver Corp in a deal valuing the company at approximately $2.1 billion, according to Reuters.

The acquisition grants Pan American Silver access to MAG’s 44% stake in the high-grade Juanicipio Silver mine in Mexico, operated by Fresnillo, which owns the remaining 56%. The deal, unanimously approved by both companies’ boards, is expected to close in the second half of 2025.

Geopolitical tensions, meanwhile, continue to lend support to Silver. India warned Pakistan of potential retaliation over recent ceasefire violations, a claim denied by Pakistan's military. Separately, Ukrainian President Volodymyr Zelenskyy expressed hope for a temporary ceasefire with Russia starting Monday, May 12, but Moscow rejected the proposal, calling instead for direct talks without preconditions.

However, gains in Silver may be capped by easing safe-haven demand amid growing optimism surrounding US-China trade relations. Over the weekend, both countries concluded productive discussions, with Beijing set to launch formal negotiations and Washington citing progress toward an agreement.

Further weighing on Silver, the Federal Reserve last week flagged inflation and labor market risks, with Chair Jerome Powell ruling out a preemptive rate cut in response to tariff-related economic concerns.