Silver Price Forecast: XAG/USD falls to near $35.50 as traders lock in profits

• Silver price declines aid profit-taking and liquidating positions to offset losses elsewhere.

• The safe-haven Silver loses flows after reports suggesting easing of the US aggression on Iran.

• The People’s Bank of China announced that keep its Loan Prime Rates unchanged on Friday.

Silver price (XAG/USD) extends its losses for the third consecutive session, trading around $35.80 during the early European hours on Friday. The price of the precious metal depreciates as traders take profits and liquidate positions to offset losses in other assets.

Additionally, the precious metals, including Silver, attract sellers due to decreased safe-haven demand, driven by reports suggesting easing of the US rhetoric toward Iran. The absence of negative developments in the Iran-Israel conflict front so far this Friday, boosting market sentiment and reviving risk appetite.

US President Donald Trump reportedly said that he will offer Iran a last chance to negotiate the end of its nuclear program. Trump noted on Thursday that he would delay his final decision on launching strikes for up to two weeks.

The non-interest-bearing Silver could have struggled as the Federal Reserve (Fed) Chair Jerome Powell cautioned that ongoing policy uncertainty will keep the Fed in a rate-hold stance. Higher interest rates tend to support elevated yields, drawing investors in search of better returns."

In a post-meeting press conference on Wednesday, Powell also noted that inflation remains somewhat above goal and could rise in the future. He highlighted the importance of the current policy stance that leaves the central bank well-positioned. The Fed announced to leave the interest rate unchanged at 4.5% in June as widely expected.

Moreover, the People’s Bank of China (PBOC) decided to leave its Loan Prime Rates (LPRs) unchanged on Friday. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively. The price of the grey metal faces challenges as the higher borrowing cost in China, one of the world's largest manufacturing hubs of electronics, solar panels, and automotive components, the country's industrial demand for Silver is significant.