Silver Price Forecast: XAG/USD Holds Above $32.50 Amid Reports of US Ban on Chinese Chipmakers

Silver Prices Under Pressure Amid Reports of US Ban on Chinese Chipmakers

Silver prices are currently under pressure, hovering just above $32.50, following reports that the Trump administration plans to add several Chinese semiconductor companies to its export blacklist, or “entity list.” This move could create additional market concerns, as silver has become increasingly tied to the chipmaking industry due to its crucial role in the production of semiconductors and electronic components. The possibility of the US placing restrictions on major Chinese chipmakers raises fears of disruption in global supply chains, which has ripple effects on the precious metals market.

However, the downside for silver may be limited by the recent weakness in the US Dollar. Economic data suggesting a slowdown in the US economy has increased expectations that the Federal Reserve could soon cut interest rates, which tends to benefit precious metals like silver. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as silver, making them more attractive to investors.

Additionally, safe-haven demand for silver, which often rises during times of global uncertainty, has been somewhat subdued as signs of easing trade tensions between the US and China emerge. The two countries have reportedly reached a tentative agreement to reduce tariffs significantly, with the US agreeing to lower tariffs on Chinese goods, while China would reduce tariffs on US goods. This agreement, if implemented, could help de-escalate trade tensions, which in turn would reduce the demand for silver as a protective asset.

While the current market environment presents some challenges for silver, the weakening US Dollar and ongoing global trade developments may help cushion any further losses in the metal’s price.