Silver Price Forecast: XAG/USD plummets to near $32 as its safe-haven demand fizzles out

• Silver price plunges to near $32.15 as 90-day US-China trade truce dampens the demand for safe-haven assets.
• Both the US and China agreed to lower tariffs by 115%.
• Investors await Fed Powell's speech for fresh monetary policy guidance.

Silver price (XAG/USD) is down over 1% to near $32.15 during North American trading hours on Wednesday. The white metal faces a sharp selling pressure as demand for safe-haven assets has fizzled out, with the United States (US) and China aiming to avert a more than a month-long trade war.

On Monday, Washington and Beijing agreed to lower import duties by 115% for 90 days, which reduced tariffs on them to 10% and 30%, respectively, after a two-day meeting in Switzerland. US Treasury Secretary Scott Bessent stated on Tuesday that Washington doesn't intend to decouple with China but wants to bring medicine, semiconductor, and other strategic industries home.

The white metal outperformed when the world's two largest powerhouses entered a trade war after Beijing announced counter-tariffs against reciprocal tariffs imposed by US President Donald Trump in April.

Additionally, easing inflationary pressures have also diminished the demand for Silver. The US Consumer Price Index (CPI) data showed on Tuesday that the headline inflation fell to 2.3%, the lowest level seen in over four years.

Going forward, the next trigger for the Silver price will be the Federal Reserve (Fed) Chair Jerome Powell's speech on Thursday. Investors would like to know whether Powell has turned dovish on the interest rate outlook after soft inflation data and a temporary US-China trade truce.

Silver technical analysis

Silver price trades in a Symmetrical Triangle formation on a four-hour timeframe. The chart pattern reflects indecisiveness among market participants. The near-term trend of the white metal is bearish as it trades below the 20-period Exponential Moving Average (EMA), which is around $32.70.

The 14-period Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sharp volatility contraction.

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 four-hour chart

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