Silver Price Forecast: XAG/USD struggles to hold $38 as US-EU trade pact improves market mood

• Silver price trades with caution near $38.00 on confirmation of the US-EU trade deal.
• Washington will recieve 15% tariffs on all imports from Brussels.
• The Fed is expected to leave interest rates steady on Wednesday.

Silver price (XAG/USD) trades cautiously near the key support level of $38.00 during Asian trading hours on Monday. The white metal is expected to face pressure as the confirmation of a framework trade agreement between the United States (US) and the European Union (EU) has diminished demand for safe-haven assets.

The US-EU trade pact has increased the risk appetite of investors. S&P 500 futures have posted significant gains during the Asian trading session, demonstrating upbeat demand for risky assets.

Over the weekend, US President Donald Trump confirmed trade agreement between Washington and Brussels in which the US will charge 15% tariffs. The baseline tariff rate in the agreement is half of what Trump threatened in the mid of the month.

Going forward, the next trigger for the Silver price will be Federal Reserve's (Fed) monetary policy announcement on Wednesday in which the central bank is expected to leave interest rates steady in the range of 4.25%-4.50%. The Fed has been keeping its borrowing rates steady since the start of the year.

Higher interest rates by the Fed for longer bodes poorly for non-yielding assets, such as Silver.

Silver technical analysis

Silver price corrects to near $38.00 from its recent highs of $39.53 posted last week. The 20-day Exponential Moving Average (EMA) is expected to act as key cushion for the Siver price, which trades around 86.25.

The 14-day Relative Strength Index (RSI) falls below 60.00, suggesting that the bullish momentum is been faded.

Looking down, the June 18 high of $37.32 will act as key support for the major. On the upside, the June 23 high near $39.53 will be a critical hurdle for the pair.

Silver daily chart