Silver Price Forecast: XAG/USD moves above $32.50 due to caution ahead of US election

• Silver price appreciates as the US Dollar loses ground amid lower Treasury yields.
• The recent poll indicated that Kamala Harris and Donald Trump are locked in a close contest across seven battleground states.
• Silver demand may increase as China approves an additional stimulus package of more than 10 trillion yuan.

Silver price (XAG/USD) breaks its three-day losing session, trading around $32.70 during the European hours on Monday. The upside of the Silver prices could be attributed to the subdued US Dollar (USD) amid lower Treasury yields. A weaker dollar generally boosts demand for dollar-denominated commodities like silver, making them more attractive to buyers using other currencies.

The US Dollar Index (DXY), which measures the value of the US Dollar against its six major peers, trading around 103.80 with 2-year and 10-year yields on US Treasury bonds standing at 4.17% and 4.31%, respectively, at the time of writing.

Silver prices may hold ground as traders are also preparing for upcoming monetary policy decisions from the US Federal Reserve (Fed) scheduled to be released later this week. The CME FedWatch Tool currently shows a 99.7% probability of a quarter-point rate reduction by the Fed in November.

Regarding US presidential election, traders adopt caution due to growing uncertainty surrounding the election results on Tuesday. The latest poll shows Vice President Kamala Harris with slight leads in Nevada, North Carolina, and Wisconsin, while former President Donald Trump holds a narrow edge in Arizona. The candidates are in close contests in Michigan, Georgia, and Pennsylvania. Conducted from October 24 to November 2, the final New York Times/Siena College poll indicated that all matchups in seven battleground states fall within a 3.5% margin of error.

The Standing Committee of the National People's Congress in China is meeting from November 4 to 8, where it is expected to approve additional debt and fiscal measures as part of a broader growth stimulus plan. Media reports suggest that the potential stimulus package could exceed 10 trillion yuan. As one of the world's largest manufacturing hubs for electronics, solar panels, and automotive components, China may have increased demand for Silver.