XAG/USD plummets to near $32 as its safe-haven demand fizzles out
Silver price (XAG/USD) is down over 1% to near $32.15 during North American trading hours on Wednesday. The white metal faces a sharp selling pressure as demand for safe-haven assets has fizzled out, with the United States (US) and China aiming to avert a more than a month-long trade war.
On Monday, Washington and Beijing agreed to lower import duties by 115% for 90 days, which reduced tariffs on them to 10% and 30%, respectively, after a two-day meeting in Switzerland. US Treasury Secretary Scott Bessent stated on Tuesday that Washington doesn’t intend to decouple with China but wants to bring medicine, semiconductor, and other strategic industries home.
The white metal outperformed when the world’s two largest powerhouses entered a trade war after Beijing announced counter-tariffs against reciprocal tariffs imposed by US President Donald Trump in April.
Additionally, easing inflationary pressures have also diminished the demand for Silver. The US Consumer Price Index (CPI) data showed on Tuesday that the headline inflation fell to 2.3%, the lowest level seen in over four years.
Going forward, the next trigger for the Silver price will be the Federal Reserve (Fed) Chair Jerome Powell’s speech on Thursday. Investors would like to know whether Powell has turned dovish on the interest rate outlook after soft inflation data and a temporary US-China trade truce.
Source: Fxstreet
