XAG/USD holds below $34.00 as traders await US Retail Sales release
The Silver price (XAG/USD) edges lower to around $33.80 after reaching its highest level since October 31, 2024, during the Asian trading hours on Monday. Nonetheless, the potential downside for the white metal seems limited due to the economic uncertainty over the impact of a global trade war and a softer Greenback.
The escalating trade war between the US and many of its largest trading partners has raised concerns about the impact on economies across the world. This, in turn, might boost the safe-haven asset like the Silver. Last week, US President Donald Trump threatened a 200% tariff on any alcohol coming to the US from the European Union (EU). Trump has also raised levies on Chinese imports into the US to at least 20%.
Additionally, supply deficits and growing industrial demand could act as strong tailwinds for the white metal. According to the global investment firm WisdomTree, investors hold a significant portion of it and expect higher prices to encourage sales. Industrial demand for silver has reached all-time highs, owing to its use in photovoltaic applications, 5G technology, and automotive electronics.
Silver traders will keep an eye on the US Retail Sales report for February, which is expected to grow by 0.7% MoM. In case of a stronger-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.
Source : Fxstreet
