Silver Price Forecast: XAG/USD plummets to near $33.00 on US-China trade talks

• Silver price falls sharply to near $33.00 on hopes of de-escalation in Sino-US trade war.
• China considers pausing tariffs on some US imports.
• Beijing denies any economic and trade talks with the US.

Silver price (XAG/USD) plunges more than 1.5% to near $33.00 during North American trading hours on Friday. The white metal falls sharply from its three-week high of $33.70 posted earlier in the day. The asset weakens as investors have become increasingly confident that the United States (US) and China will make a deal sooner.

Hopes of a truce on a trade war between the world's two largest powerhouses have increased as China has stated that it is considering suspending additional tariffs on imports of medical equipment and some industrial chemicals from the US, Bloomberg reported.

Investors see the scenario as favorable for the global economic outlook. Theoretically, improving global economic prospects diminish the demand of safe-haven assets, such as Silver.

Meanwhile, the US Dollar (USD) has bounced back after a sharp corrective move on Thursday. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, recovers to near 99.75.

However, contradictory statements from US President Donald Trump and China over whether both nations have come on the table or not for negotiating trade deals are expected to keep investors on the sidelines. Trump has been stating that discussion between Washington and Beijing on trade are going well, however, China has denied these remarks, saying that there has not been any "economic and trade negotiations between China and the US".

Silver technical analysis

Silver price falls sharply after posting a fresh three-week high around $33.70. However, the near-term outlook of the white metal remains bullish as it holds the 20-day Exponential Moving Average (EMA), which trades around $32.60.

The 14-day Relative Strength Index (RSI) struggles to break above 60.00. A fresh bullish momentum would emerge if the RSI will break above that level.

Looking up, the March 28 high of $34.60 will act as key resistance for the metal. On the downside, the April 11 low of $30.90 will be the key support zone.

Silver daily chart