Silver Price Drops Toward $39.00 as Trade Deal Hopes Weigh on Safe-Haven Demand

Silver Price Nears $39.00 as Trade Optimism Pressures Safe-Haven Demand

Silver (XAG/USD) extended its decline into a second straight session, trading around $39.10 per troy ounce during Thursday’s Asian session. The pullback reflects reduced demand for safe-haven assets as global risk sentiment improves on the back of emerging US trade deals.

Trade Agreements Dampen Risk Aversion

According to the Financial Times, the United States and European Union are close to finalizing a deal that would impose a 15% tariff on EU goods entering the US. This follows an earlier announcement from President Donald Trump about a similar 15% tariff agreement with Japan, in exchange for investment concessions.

The optimism around these deals is weighing on traditional safe-haven assets like Silver, as investors anticipate improved geopolitical stability and reduced trade risk.

Tariff Uncertainty Lingers for Other Nations

Despite progress with the EU and Japan, tariff threats ranging from 15% to 50% still loom over South Korea, India, and others, keeping some market participants cautious. US Treasury Secretary Scott Bessent is expected to meet Chinese officials next week, and the outcome may further shift sentiment in the commodities space.

Fed Policy in Focus

On the monetary policy front, attention now turns to next week’s Federal Reserve meeting, where interest rates are expected to remain unchanged. However, traders are positioning for a potential rate cut in October, which could offer some medium-term support for Silver.

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