Silver Price Forecast: XAG/USD jumps to near $30.50 on potential US-China trade war
NEW YORK (April 8) Silver price (XAG/USD) advances to near $30.50 during North American trading hours on Tuesday. The white metal strengthens as its safe-haven appeal has increased, with traders becoming increasingly concerned over the outlook of trade relations between the United States (US) and China.
Earlier in the day, a spokesperson for the Chinese Ministry of Commerce warned that new tariff threats by US President Donald Trump were "a mistake on top of a mistake" and that China would “fight to the end” to protect its interests. The statement from Beijing came after Trump threatened to increase import duties on China to 104% if it imposed 34% tariffs on products imported from the US.
On Thursday, China announced a 34% levy on exports from the US in retaliation to similar reciprocal tariffs slapped by Donald Trump on them on the Liberation Day.
The scenario of a trade war between China and the US will be unfavorable for the global economy. The appeal of Silver increases amid heightening global economic tensions.
However, the demand for Silver as a metal decreases, given its significant application in various industries. China is considered the manufacturing hub of the world, and silver is demanded in various industries, such as Electric Vehicles (EV), electronics, and solar energy.
Going forward, the next major trigger for the Silver price will be the Consumer Price Index (CPI) data for March, which will be released on Thursday. The inflation data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.
Silver technical analysis
Silver price recovers to test the breakdown region of the Ascending Triangle chart formation near its upward-sloping border around the August 8 low of $26.45. The horizontal resistance of the above-mentioned chart pattern is plotted from the October 22 high of $34.87.
Technically, the breakdown of the Ascending Triangle pattern indicates results in a volatility expansion, which leads to higher volume and formation of wide ticks.
The overall trend of the Silver price is bearish as it trades below the 200-day Exponential Moving Average (EMA), which trades around $30.70.
The 14-day Relative Strength Index (RSI) slides into the 20.00-40.00 range, indicating that a bearish momentum has been triggered.
Looking down, the August 8 low of $26.45 will act as key support for the Silver price. While, the April 4 high of $32.00 will be the major barrier.
FXStreet
