Silver Price Forecast: XAG/USD plummets below $31 as US Trump picks Bessent as Treasury Secretary

• Silver price falls sharply below $31.00 after Scott Bessent's appointment as US Treasury Secretary by President-elect Donald Trump.
• The impact of Bessent's pick was also viewed on the US Dollar and bond yields.
• Investors await the US PCE inflation data for fresh guidance on interest rates.

Silver price (XAG/USD) plunges below $31.00 in European trading hours on Monday. The white metal weakens after the appointment of hedge fund manager Scott Bessent as Treasury Secretary by President-elect Donald Trump.

The market reaction seems to be favoring risk-perceived assets on Bessent's selection, as S&P 500 futures have posted significant gains in the European session. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, corrects to near 107.00. 10-year US Treasury yields plummet to near 4.33%.

However, his decisions are expected to be supportive of Trump's policies regarding trade and taxes. Bessent said in an interview with the Wall Street Journal (WSJ) that he would focus on putting tariffs into action, cutting spending, and maintaining the status of the Greenback as the world's reserve currency after Trump picked him as the highest-ranked United States (US) economic official. This could keep the US Dollar (USD) prepared for a sharp recovery.

Trump's policies are expected to boost US inflation and growth, which could result in fewer interest rate cuts from the Federal Reserve (Fed) in 2025. For the December meeting, traders are divided over whether the Fed will cut interest rates by 25 basis points (bps) to 4.25%-4.50% or leave them unchanged at their current levels.

This week, investors will focus on the US Personal Consumption Expenditure Price Index (PCE) data for October, which will be published on Wednesday. The core PCE inflation, the Fed's preferred inflation measure, is estimated to have accelerated to 2.8% from 2.7% in September on year-on-year.

Silver technical analysis

Silver price resumes its declining trend after a mean-reversion move to near the 20-day Exponential Moving Average (EMA) around $31.40. The white metal is expected to retreat to the November 14 low of around $29.70. The white metal weakened after the breakdown of the horizontal support plotted from the May 21 high of $32.50.

The upward-sloping trendline from the February 29 low of $22.30 will act as key support for the Silver price around $29.50.

The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a sideways trend.

Silver daily chart