Silver Price Forecast: XAG/USD Holds at $33.50 as Safe-Haven Demand Eases

Silver Price Forecast: Consolidation Near $33.50 as Safe-Haven Demand Wanes

Silver price (XAG/USD) remains steady near the $33.50 mark during Monday’s European trading session, consolidating after more than 1% gains in the previous session. The recent easing in market tensions follows US President Donald Trump’s decision to delay imposing a 50% tariff on European Union (EU) imports, originally scheduled for June 1, to July 9. This move has reduced immediate safe-haven demand for precious metals like silver, as fears of a full-blown US-EU trade war temporarily subside.

Safe-Haven Demand Diminishes but Could Resurge

The improved risk sentiment led by the tariff delay has diminished silver’s appeal as a safe-haven asset in the short term. However, uncertainty remains in the background, with growing concerns over the US economy expected to provide underlying support to silver prices. Moody’s recent downgrade of the US credit rating from Aa1 to Aaa, reflecting concerns over fiscal health, has added to the cautious market mood.

Furthermore, expectations of an increasing US fiscal deficit, should President Trump’s sweeping “One Big Beautiful Bill” pass the Senate floor, could reignite safe-haven demand for silver and other precious metals. As such, while silver currently consolidates around $33.50, investors remain watchful for potential upward momentum should economic anxieties intensify.

Technical Outlook

From a technical perspective, silver’s ability to hold above key support levels around $33.40 indicates resilience amid mixed market signals. Should momentum build, prices could test resistance zones near $34.60, the high seen on May 28, and possibly push towards the psychological $35.00 level. However, a failure to hold support may open the door to further consolidation or declines.

In summary, silver prices are navigating a complex environment of easing trade tensions and ongoing economic uncertainties, with safe-haven demand poised to play a decisive role in near-term price action.