Silver Price Forecast: XAG/USD rises to near $38.80 as Fed Cook's removal dampens market mood

• Silver price attracts slight bids as the ousting of Fed Governor Cook has increased safe-haven demand.
• Trump accused Fed's Cook for providing false statements in one or more mortgage agreements.
• The Fed is expected to cut interest rates in the September meeting.

Silver price (XAG/USD) recovers its early losses and trades 0.33% higher to near $38.80 during the European trading session on Tuesday. The white metal gains as the market sentiment turns slightly risk-averse, following the removal of Federal Reserve (Fed) Governor Lisa Cook by United States (US) President Doanld Trump over mortgage allegations.

S&P 500 futures are down 0.15% during European trading hours. US equities have declined further after a weak session on Monday, indicating a cautious market mood. The demand for safe-haven assets, such as Silver, increases in a risk-off market environment.

US President Trump announced Fed Cook's removal by posting her termination letter on Truth.Social in which he stated that Cook has been removed from her designation, with immediate effect, for making false statements on one or more mortgage agreements.

However, Cook said that she will continue to carry out her duties as Fed Governor. In a statement shared by her attorneys, "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so."

The event has been seen as a major threat to Fed's independence, which has undermined the credibility of the US administration.

Broadly, firm expectations that the Fed will cut interest rates in the September policy meeting are continued to support the Silver price. Lower interest rates by the Fed bode well for non-yielding assets, such as Silver.

Silver technical analysis

Silver price trades slightly higher around $38.80 on Tuesday. The near-term trend of the white metal remains bullish as it holds above the 20-day Exponential Moving Average (EMA), which trades around $38.10.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating indecisiveness among market participants.

Looking down, the June 24 low of $35.28 will act as key support for the major. On the upside, the July 23 high near $39.53 will be a critical hurdle for the pair.

Silver daily chart