Silver Price Forecast: XAG/USD gains traction above $32.00 on trade war concerns
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Silver price drifts higher to $32.25 in Thursday’s Asian session.
Rising concerns about trade tension and potential retaliatory measures by Trump support the Silver price.
Fed’s Powell emphasized that the central bank is in no rush to cut rates and there has been great progress on inflation.
Silver price (XAG/USD) edges higher to $32.25 during the Asian trading hours on Thursday. Trade war concerns drive the safe-haven demand, supporting the white metal. Traders await the US weekly Initial Jobless Claims and Producer Price Index (PPI), which are due later on Thursday.
US President Donald Trump on Monday imposed a 25% tariff on all steel and aluminum imports into the United States (US) with no exceptions or exemptions. The White House said late Wednesday that Trump could announce his reciprocal tariff plan on Thursday.
Trump recently said he planned to slap reciprocal tariffs on “every country” that imposes import duties on the United States. The concerns about the trade war tensions could further support the Silver price.
Data released on Wednesday showed that the US consumer prices rose more than economists expected in January, raising the possibility that the Federal Reserve (Fed) will hold interest rates higher for longer as it battles to bring down price pressures. Fed Chair Jerome Powell noted the latest inflation data showed that while the US central bank has made substantial progress toward taming inflation, there is still more work to do. The higher for longer Fed rate narrative could lift the Greenback and weigh on the USD-denominated commodity price.
"The takeaway is no matter what the reason was for the upside surprise, the Fed has been very clear that it won't cut rates until inflation is close to 2%," said Adam Button, chief currency analyst at ForexLive in Toronto.
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