XAG/USD trades almost flat around $33, outlook remains firm
Silver price (XAG/USD) wobbles in a tight range around $33.00 during North American trading hours on Friday. The white metal remains almost flat despite a substantial weakness in the US Dollar (USD). The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, refreshes an over three-week low around 99.10.
Technically, a lower US Dollar makes the Silver price a value bet for investors.
The US Dollar continues to suffer from increasing concerns over the United States (US) fiscal imbalances in the wake of President Donald Trump’s tax-cut and spending bill, which has been advanced to the Senate after being approved by the House of Representatives.
According to the nonpartisan Congressional Budget Office, Trump’s new bill would increase the US debt by $3.8 trillion over the decade, which is currently $36.2 trillion. Such a scenario would further damage the US Sovereign credit rating, which was already downgraded by Moody’s to Aa1 from Aaa last week.
Meanwhile, a fresh escalation in trade tensions between the US and the European Union (EU) is expected to support the Silver price. Theoretically, the demand for safe-haven assets, such as Silver, increases when global economic tensions escalate.
During early North American trading hours, US President Trump threatened to impose 50% flat tariffs on the EU in a post on Truth.Social. Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025. There is no tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!", Trump said.
Source: Fxstreet
