Silver Price Forecast: XAG/USD rises to near five-month highs, $33.50 level

• Silver price climbs to a near five-month high of $33.40, last seen on February 14.
• Demand for the safe-haven metal strengthens amid escalating trade tensions and growing fears of a potential US recession.
• Silver also gains momentum as softer US inflation data fuels speculation of the Fed delivering further rate cuts soon.

Silver price (XAG/USD) continues its upward momentum for the third consecutive session, hovering around $33.30 per troy ounce during Asian trading hours on Thursday. The precious metal benefits from growing safe-haven demand amid escalating trade tensions and mounting concerns over a potential United States (US) recession.

Trade tensions intensified after US President Donald Trump imposed higher tariffs on steel and aluminum imports, heightening economic uncertainty and boosting Silver's appeal as a safe-haven asset. Trump also described the economy as being in a "transition period," signaling a possible slowdown. Investors interpreted his comments as an early warning of potential economic turbulence ahead.

The non-interest-bearing commodities including Silver gained traction as the US inflation cooled more than anticipated in February, raising speculation that the Federal Reserve (Fed) might cut interest rates sooner than expected.

US monthly headline inflation slowed to 0.2% in February from 0.5% in January, while core inflation eased to 0.2%, below the forecasted 0.3%. On an annual basis, headline inflation declined to 2.8% from 3.0%, while core inflation slipped to 3.1% from 3.3%. Market participants are now awaiting Thursday's US Producer Price Index (PPI) data and weekly jobless claims for further economic cues.

Additionally, demand for dollar-denominated Silver could rise as the US Dollar (USD) remains under pressure due to cooling inflation. A weaker Greenback makes commodities more affordable for foreign buyers. At the time of writing, the US Dollar Index (DXY), which measures the USD against six major currencies, remains steady around 103.50.