Silver Price Forecast: XAG/USD corrects to near $32.40 as Trump reprieves tariffs on automobiles
NEW YORK (March 6) Silver Price (XAG/USD) corrects from the weekly high of $32.70 and drops to near $32.40 in North American trading hours on Thursday. The white metal drops as fears of an intense global trade war have eased as the White House confirmed that United States (US) President Donald Trump will provide a one-month relaxation of tariffs on automobiles imported from Canada and Mexico.
On Tuesday, proposed 25% tariffs on Canada and Mexico from President Donald Trump went into effect.
"We spoke with the big three auto dealers and are going to give a one-month exemption on any autos coming through USMCA, Leavitt said and added, “Trump is open to hearing about additional tariff exemptions.”
Historically, heightened geopolitical tensions improve the appeal of precious metals, such as Silver.
Meanwhile, an increase in US bond yields after surprisingly upbeat US ISM Services PMI data for February has also weighed on the Silver price. 10-year US Treasury yields gain to near 4.29%. Higher yields on interest-bearing assets increase the opportunity cost of holding investments in non-yielding assets, such as Silver.
Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for February, which will be released on Friday. The official employment data will influence market speculation for the Federal Reserve’s (Fed) monetary policy outlook.
FXStreet
