Silver Price Forecast: XAG/USD maintains position near $31.50 due to rising trade tensions

• Silver continues to gain ground, supported by a weakening US Dollar.
• Heightened US-China trade tensions are driving safe-haven demand for Silver.
• Softer US inflation data has increased expectations for potential Fed rate cuts beginning in June.

Silver (XAG/USD) continues its winning streak for the third straight session, trading around $31.30 during Friday's Asian session. The precious metal is gaining traction as the US Dollar weakens, with the US Dollar Index (DXY) dipping to around 100.20 at the time of writing.

Investor demand for safe-haven assets like Silver is also being fueled by escalating US-China trade tensions. On Thursday, the US announced a sharp increase in tariffs on Chinese imports--raising them to 145% with a new 125% levy on top of an existing 20% duty. This move overshadowed US President Donald Trump's 90-day pause on higher tariffs for other countries, intensifying concerns over potential economic fallout from the US-China standoff.

Adding to Silver's appeal, US inflation data came in softer than expected. March's Consumer Price Index (CPI) showed headline inflation falling to 2.4% year-over-year--below the expected 2.6% and down from 2.8% in February. Core CPI, excluding food and energy, rose just 2.8%, also below estimates. On a monthly basis, headline CPI declined 0.1%, while core CPI inched up 0.1%. This has led markets to price in potential Fed rate cuts starting in June, with the possibility of a full percentage point reduction by year-end.

Meanwhile, the latest Federal Open Market Committee (FOMC) minutes suggested broad concern among policymakers over the challenge of balancing inflation risks with slowing economic growth. Dallas Fed President Lorie Logan warned that unexpected trade measures could spur job losses and inflation, potentially forcing the Fed into a defensive stance. Weekly jobless claims also ticked up slightly to 223,000.