Silver Price Forecast: XAG/USD hovers near $32.50 amid US ban news on China's chip firms

• Silver price struggles as the Trump administration to add several Chinese semiconductor firms to its export blacklist.
• Safe-haven demand for precious metals, including Silver, has weakened amid signs of easing global trade tensions.
• Silver's downside could be capped as US Dollar softens following economic data that has heightened odds of Fed rate cuts.

Silver (XAG/USD) is pulling back from its recent gains seen in the previous session, hovering around $32.50 during Friday's Asian trading hours. The metal is under pressure, possibly due to a Financial Times report indicating that the Trump administration plans to add several Chinese semiconductor companies to its export blacklist, known as the "entity list." Silver's growing connection to the chipmaking industry--owing to its essential role in electronics and semiconductor production--is amplifying the market's sensitivity to such developments.

Meanwhile, safe-haven demand for precious metals, including Silver, has softened amid signs of easing global trade tensions. The US and China have reportedly reached a preliminary agreement to significantly reduce tariffs. According to the proposed deal, the US would lower tariffs on Chinese imports from 145% to 30%, while China would cut its tariffs on US goods from 125% to 10%. This breakthrough is viewed as a positive move toward de-escalating trade frictions between the two economic powerhouses.

Despite the recent pullback, Silver's downside may be limited as the US Dollar (USD) weakens following economic data that increased expectations of potential Federal Reserve (Fed) rate cuts in the near term. Lower US interest rates generally support Silver prices, as they reduce the opportunity cost of holding non-yielding assets like precious metals.

However, Fed Chair Jerome Powell warned that inflation may become more unpredictable due to more frequent supply shocks, which could complicate the Fed's efforts to maintain price stability moving forward.