Silver Price Forecast: XAG/USD Jumps Toward $38 on Fresh Tariff Uncertainty and Safe-Haven Demand

Silver Price Forecast: XAG/USD Jumps Toward $38 on Fresh Tariff Uncertainty and Safe-Haven Demand

The Silver price (XAG/USD) surged to around $37.80 per troy ounce in early Wednesday trading, extending its recovery after two consecutive sessions of losses. The rally is driven by growing safe-haven demand, as traders react to increased geopolitical uncertainty linked to new tariff measures announced by the U.S. government.

Tariff Tensions Fuel Flight to Safe-Haven Silver

U.S. President Donald Trump announced new tariff percentages to be applied from August 1st, impacting 25 countries including major partners like Canada, Mexico, and the European Union (EU). Smaller countries in Africa and the Caribbean are also expected to receive notices soon, with proposed tariffs of "a little over 10%", according to Reuters.

This global trade friction is pushing investors toward precious metals, particularly Silver, which traditionally acts as a hedge against uncertainty.

Sticky US Inflation Keeps Fed Hawks in Play

Silver’s rally is being tempered by concerns that high inflation will keep Federal Reserve interest rates elevated. The June CPI report showed a 2.7% YoY rise in headline inflation, while Core CPI came in at 2.9%, above the Fed’s 2% target but slightly below the expected 3.0%.

Inflation Recap:

• CPI YoY: 2.7%
• Core CPI: 2.9%
• Fed Target: 2.0%

These numbers suggest the Fed may prolong its higher-rate stance, a bearish factor for non-yielding assets like Silver.

US Dollar Strength Caps Silver Gains

The US Dollar Index (DXY) holds steady near 98.50, underpinned by expectations of tight monetary policy. A stronger USD generally weighs on Silver by making it more expensive for foreign buyers, potentially limiting upside moves in XAG/USD.

A rising USD typically inversely correlates with Silver prices. Watch DXY levels closely for clues.

Upcoming US economic releases including the Producer Price Index (PPI), Fed Beige Book, and Industrial Production figures will be closely monitored by Silver traders for further direction.

Related Reads on Tredu.com:

• Why Precious Metals Surge During Trade Wars
• How Fed Rate Decisions Impact Silver Prices
• XAG/USD Technical Outlook for Q3 2025