Silver Price Forecast: XAG/USD remains above $38.00 due to renewed safe-haven demand

• Silver price may appreciate toward a 14-year high of $39.13, recorded on Monday.

• Safe-haven demand increases as Trump has warned to impose “very severe” tariffs on Russia.

• Fed Chair Powell signaled that inflation may increase over the summer due to tariff-related pressures.

Silver price (XAG/USD) holds ground after registering more than 0.50% losses, trading around $38.10 per troy ounce during the Asian hours on Tuesday. The Silver price may further advance toward a 14-year high of $39.13, which was reached on Monday, amid renewed safe-haven demand.

Traders adopt caution following the US President Donald Trump’s latest threat to impose “very severe” tariffs on Russia if no peace deal is reached within 50 days. Moreover, Trump, alongside NATO Secretary-General Mark Rutte, confirmed that European allies will purchase billions of dollars’ worth of American-made weapons, such as Patriot missile systems. These weapons will be transferred to Ukraine in the coming weeks to tackle intensified Russian attacks.

The non-interest-bearing Silver faced challenges, potentially due to Federal Reserve (Fed) Chair Jerome Powell’s remarks. Fed Chair Powell signals that inflation is expected to rise over the summer, driven by tariff-related pressures, boosting the probability that the Fed may delay interest rate cuts until later this year. Meanwhile, concerns over central bank independence resurfaced as President Trump renewed his criticism of Powell, insisting that interest rates should be at 1% or lower.

Moreover, the concerns over global trade ease as Trump indicated his willingness to engage in further tariff negotiations with the European Union and other key partners. However, traders would likely adopt caution amid uncertainty surrounding the tariff tensions. The US government immediately imposed on Monday a 17% duty on most imports of fresh tomatoes from Mexico after negotiations ended without an agreement to avert the tariff.