Silver Price Forecast: XAG/USD remains solid near $34.00 amid increased safe-haven demand

• Silver maintains its position near the five-month high at $33.96, reached on Thursday.
• Safe-haven demand strengthened after President Trump threatened a 200% tariff on all European wines and champagne.
• A non-interest-bearing Silver finds support from growing expectations of Fed rate cuts following weaker US inflation data.

Silver price (XAG/USD) continues its upward momentum for the fourth consecutive day, trading around $33.90 per troy ounce during European trading hours on Friday. The precious metal benefits from increased safe-haven demand as global trade tensions increase.

Market concerns intensified after US President Donald Trump threatened 200% tariffs on European wines, champagnes, and other alcoholic beverages in response to the EU's 50% tariff on American whiskey.

Silver, a non-interest-bearing asset, finds support from growing expectations of Federal Reserve (Fed) rate cuts following weaker US inflation data. On Thursday, the US Producer Price Index (PPI) rose 3.2% year-over-year in February, down from 3.7% in January and below the 3.3% forecast. The core PPI, which excludes food and energy, increased 3.4% annually, compared to 3.8% in January.

Meanwhile, Wednesday's Consumer Price Index (CPI) data showed a decline to 2.8% year-over-year from 3.0%, while core inflation fell to 3.1% from 3.3%.

In political developments, Senate Democratic Leader Chuck Schumer announced late Thursday his support for keeping the government open, as the Senate prepares to vote on a GOP stopgap funding bill on Friday.

Additionally, US Commerce Secretary Howard Lutnick stated that the administration plans to balance the budget within President Donald Trump's term, aiming to achieve this over three years.

However, Silver's upside could be limited as the US Dollar (USD) continues to strengthen. A stronger USD makes Silver more expensive for foreign buyers, potentially dampening demand. At the time of writing, the US Dollar Index (DXY), which tracks the USD against six major currencies, is hovering near 104.00.