Silver Price Forecast: XAG/USD remains below $30.00 due to improved market sentiment

• Silver prices edged lower amid a risk-on market sentiment, driven by optimism as Trump's incoming team considered gradual tariff hikes.
• The non-yielding Silver depreciates as the recent US labor market data reinforced the Fed's hawkish policy stance in January.
• The industrial demand for Silver could increase following China's recent stimulus measures.

Silver price (XAG/USD) retraces its recent gains from the previous session, trading around $29.80 per barrel during the Asian hours on Wednesday. The price of the safe-haven Silver faces challenges due to risk-on market sentiment following reports about US President-elect Donald Trump's economic team considering a gradual increase in import tariffs boosted investor confidence.

Bloomberg reported on Monday that Trump's incoming administration is evaluating a phased approach to implementing tariffs, aiming to prevent a sharp rise in inflation while managing trade policy adjustments.

The non-yielding Silver faces challenges as the recent US labor market figures for December, which is expected to support the US Federal Reserve's (Fed) decision to maintain interest rates at current levels in January.

Moreover, reinforced hawkish sentiment surrounding the Fed has sparked a rise in US Treasury yields. Rising yields boosted the US Dollar to recent highs, making Silver more expensive for buyers using foreign currencies and dampening Silver demand.

However, the Greenback corrects downwards following the disappointing US December Producer Price Index (PPI) data. Market participants will keep an eye on the US Consumer Price Index (CPI) inflation data, which is due later on Wednesday.

The demand for Silver could increase following China's recent stimulus measures. As the world's largest consumer of metals, any improvement in China's economic conditions could significantly boost the industrial use of Silver.

People's Bank of China (PBOC) Governor Pan Gongsheng stated on Monday that "interest rate and reserve requirement ratio (RRR) tools will be utilized to maintain ample liquidity." Gongsheng reaffirmed China's plans to increase the fiscal deficit and emphasized that China will continue to be a driving force for the global economy.