Silver price declined slightly on Monday as traders waited for US Retail Sales data. The greyish metal traded at $33.67 in the European trading session, down by 0.4%, marginally down from the four-month highs of $34.08 set on Friday. Safe haven assets have been attracting buyers on the back of rising trade barriers among some of the world’s leading economies.
XAGUSD has gained 4.5% in the last five sessions and the uptrend could extend this week if trade relations between the US and the European Union continue to sour after last week’s tariff war escalation.
US President Donald Trump announced a 25% and 10% tariffs against EU aluminium and steel last week, with the Eurozone retaliating with 50% tariffs against $28 billion worth of US goods. However, Trump later threatened a 200% tariff on alcohol imports from the EU.
The demand for safe haven silver could rise this week if Trump makes good his threat. However, the geopolitical risk premium on silver prices has declined as Russia and Ukraine show willingness to proceed with ceasefire talks.
Silver’s richer cousin, gold breached the psychological $3,000 mark last Friday as recession fears mounted over the the trajectory of the US economy. That sentiment is still in place and favours continued by silver prices.
Silver Price Prediction
The momentum on silver price signals the likely continuation of the downside below the pivot mark at $33.85 The metal will likely go lower and find the first support at $33.50. However, a stronger downward momentum will break below that level and potentially test $33.31.
Alternatively, breaking above $33.85 will shift the momentum to the upside. In that case, the action will likely encounter the first resistance at $34.00. Moreover, an extended control by the buyers will break above that level, invalidating the downside narrative and potentially testing $34.20.
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