Silver Price Forecast: XAG/USD steadies around $33.50 due to weaker safe-haven demand
Silver price stays silent as safe-haven demand dampens after Trump extended the 50% tariff deadline on EU imports.
The safe-haven Silver may regain its ground amid rising concerns over the US economy.
Silver attracted buyers after Moody’s downgraded the US credit rating from Aaa to Aa1.
Silver price (XAG/USD) remains steady after registering more than 1% gains in the previous session, trading around $33.40 per troy ounce during the European hours on Monday. Safe-haven demand for precious metals, including Silver, weakened due to easing trade war between the United States (US) and the European Union (EU).
The risk sentiment improves US President Donald Trump extended the tariff deadline on the European Union (EU) from June 1 to July 9. Trump stepped back after threatening to impose a 50% tariff on imports from the European Union.
However, the downside of the Silver price could be limited as the safe-haven demand would strengthen amid growing uncertainty surrounding the US economy. US fiscal deficit could increase further when Trump's “One Big Beautiful Bill” passes on Senate floor.
On Sunday, US Senator Ron Johnson said in an interview on CNN, "I think we have enough votes to stop the process until the President gets serious about spending reduction and reducing the deficit.” “My primary focus now is spending. This is completely unacceptable. Current projections are a $2.2 trillion per year deficit,” Johnson added.
Moreover, Silver attracted buyers after Moody’s downgraded the US credit rating from Aaa to Aa1. Moody’s now projects US federal debt to climb to around 134% of GDP by 2035, up from 98% in 2023, with the budget deficit expected to widen to nearly 9% of GDP.
Chicago Federal Reserve (Fed) President Austan Goolsbee noted on Friday that adjustments in the Fed’s interest rates are likely to be delayed due to Trump’s latest tariff threats. Meanwhile, Kansas City Fed President Jeffrey Schmid said that policymakers will gauge hard data before deciding on interest rate decisions, and the Fed needs to be careful how much emphasis it puts on soft data.
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