Silver price has stayed on course to register the third successive weekly gain despite taking a hit as investors look for fresh impetus in the US-China trade war. The grey metal traded at $32.64 per ounce at the spot market, with its daily gain at $0.74% at the time of writing. It got rejected at the $33.00 mark on Monday and flipping that level to a support will be key to sustaining an upward momentum.
Trade tariffs and dollar weakness propel silver price
China and the United States are still implementing their triple-percentage tariffs against each other, but there have been signs of thawing of the hard stance in recent days. The White House stated last week that the US was open to trade talks with China, with President Donald Trump hinting that a deal could be in place in the next three or four weeks.
In addition, China replaced its lead trade negotiator last week, in a move seen as positioning itself for potential trade talks. However, the world’s second-largest economy warned over the weekend that it could institute counter-measure against countries that appease the US at China’s expense. Silver price depends on not only safe haven, but also industrial demand, which has been impacted negatively by the sour global economic outlook created by the harsh trade tariffs.
However, silver price also has support from the US dollar’s declining allure amid US economic recession fears. In the latest instance, Trump has upped the pressure on Federal Reserve Chairman Jerome Powell, accusing him of taking too long to cut interest rates as the economy struggles. That paints a doubtful picture of the health of the US economy.
This sentiment has sent the dollar lows against six of the most popular currencies in the world: the euro, Japanese yen, British Pound, Swedish Krona, Canadian dollar and Swiss Franc. The DXY index, which weighs the dollar against the listed currencies, was at 98.60, near three-year lows as of this writing.
Silver Price Prediction
The momentum on silver price calls for further upside above $32.42 . The metal will likely meet initial resistance at $32.89.However, a stronger upward momentum will break above that level and could take the price higher to have a go at the second resistance at $33.25.
On the other hand, breaking below $32.42 will shift the momentum to the downside. If that happens, XAUUSD will likely find initial support at $ 32.03. The upside narrative will be invalid if the price breaks below that level. Meanwhile, an extended control by the sellers could take the price lower and test $ 31.64.
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