Silver Finds Temporary Support Below $32, Outlook Remains Fragile
Silver (XAG/USD) prices bounced back near $32.00 during European trading hours on Thursday (05/15) after dipping near a monthly low around $31.65 earlier in the day. The outlook for silver prices remains bearish as trade relations between the United States (US) and China continue to improve.
During European trading hours, US Treasury Secretary Scott Bessent hinted at more talks with China to avoid trade tensions. "We will have a series of negotiations with China to prevent further escalation," Bessent said.
Meanwhile, Beijing also appears to be trying to improve relations with the US. On Wednesday, China's Commerce Ministry suspended non-tariff measures taken against 45 US entities after Washington and Beijing agreed to a 90-day pause in the trade war in which they lowered tariffs by 115%.
The easing of US-China trade tensions has forced investors to reassess the global economic outlook. In theory, an improving global economy reduces demand for safe-haven assets, such as Silver.
Meanwhile, investors await Federal Reserve (Fed) Chairman Jerome Powell’s speech, due later in the North American session. Investors will be looking for cues for any change in the Fed’s stance on the monetary policy outlook following the temporary US-China trade truce and weak US Consumer Price Index (CPI) data for April.
Silver prices could face further pressure if Fed’s Powell directs that interest rates should remain where they are in the face of economic uncertainty due to US President Donald Trump’s new economic policies. Higher Fed rates for longer are a bad sign for non-yielding assets, such as Silver.
Source: FXStreet
