Silver Price Forecast: XAG/USD retreats from record high to near $53.00 on some profit-taking

• Silver price edges lower to around $53.10 in Thursday’s Asian session. 

• Market expectations for further interest rate cuts by the Fed are increasing after Fed’s Powell speech. 

• The US government shutdown and US-China trade tensions boost the safe-haven flows. 

Silver price ( XAG/USD) trades in the negative territory around $53.10 during the Asian trading hours on Thursday. The white metal retreats from the all-time high of $54.86 amid some profit-taking. However, expectations of US rate cuts and geopolitical and economic uncertainties could provide some support to the white metal. 

Silver edges higher after dovish comments from Federal Reserve (Fed) Chair Jerome Powell bolstered bets on a series of rate cuts in the coming months. Traders are currently pricing in nearly a 98% chance of a 25 basis points (bps) Fed rate cut in October, followed by another reduction in December, which is fully priced in, according to Reuters. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal. 

Furthermore, ongoing concerns about the US government shutdown and renewed trade tension between Washington and Beijing could boost the safe-haven flows, benefiting the Silver price. US President Donald Trump said Washington was considering cutting some trade ties with China after both countries began imposing additional port fees on ships carrying cargo. This measure will likely raise trading costs and disrupt freight flows. 

Trump still plans to meet with Chinese President Xi Jinping later this month. Any signs of easing trade tensions between the world’s two largest economies could undermine the Silver price. Temporary sell-off or profit-taking cannot be ruled out in the near term as the Silver price has risen over 80% year-to-date (YTD).