Silver Price Forecast: XAG/USD plummets to near $30 amid delay in Trump's tariff hike plans

• Silver price plunges to near $30.00 as US President Trump delays tariff hikes.
• A delay in Trump tariff plans and hopes of a Russia-Ukraine truce have improved the market mood.
• The Fed is widely anticipated to keep interest rates unchanged on Wednesday.

Silver price (XAG/USD) dives an almost 1.75% to near $30.00 in North American trading hours on Thursday. The white metal has been hit hard as the overall market sentiment has broadly stabilized. The market mood has become favorable for risk-perceived assets as United States (US) President Donald Trump has not imposed tariff hikes yet, while he was anticipated to do the same right on his first day at work.

Donald Trump has commented that he is considering 25% tariff hikes on Mexico and Canada and 10% on China that will come into effect from February 1. His presidential memo also suggested that tariffs are not coming swiftly, and he directed federal agencies to study trade policies and evaluate trade relationships. No concrete announcement of tariff hikes has eased the risk-aversion mood as market participants expect Trump's tariff policy implementation will be more gradual than feared.

Apart from growing expectations that Russia might have a truce with Ukraine, it has also trimmed the risk premium of precious metals. Trump has threatened to impose sanctions on Russia if he continues the war with Ukraine.

Historically, the safe-haven demand for precious metals, such as Silver, diminishes in a stable risk environment.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades subduedly after gaining ground post refreshing the two-week low of 107.75. The US Dollar (USD) is expected to remain broadly sideways, with investors awaiting the Federal Reserve's (Fed) monetary policy decision on Wednesday. The Fed is almost certain to announce a pause to the current policy-easing spell and leave interest rates unchanged in the range of 4.25%-4.50%.

Silver technical analysis

Silver price falls back to near the 20-day Exponential Moving Average (EMA) around $30.25 after failing to break above the upward-sloping trendline around $30.90, which is plotted from 29 February 2024 low of $22.30 on a daily timeframe.

The broader outlook of the Silver price remains firm above the 200-day Exponential Moving Average (EMA), which trades 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