Silver Price Forecast: XAG/USD rebounds near $52.00 due to risk-off mood, dovish Fed tone

• Silver price rebounds after registering more than 4.25% losses in the previous session.
• Silver may attract renewed buying interest amid heightened risk aversion stemming from the ongoing US government shutdown.
• The upside of the safe-haven Silver could be limited due to easing US-China trade tensions.

Silver price (XAG/USD) edges higher after registering more than 4.25% losses in the previous session, trading around $52.00 per troy ounce during the European hours on Monday. The price of the precious Silver plunged as investors booked profits after reaching a record high of $54.86 on October 16.

However, the non-interest-bearing Silver may regain its ground amid an increased likelihood of further rate cuts by the US Federal Reserve (Fed). The CME FedWatch Tool indicates that markets are now pricing in nearly a 99% chance of a Fed rate cut in October and a 96% possibility of another reduction in December.

Additionally, Silver attracts buyers due to increased risk aversion, driven by the ongoing US government shutdown, which has stretched into its 19th day with no resolution in sight, as senators failed for the tenth time to break the impasse during Thursday's votes. It now stands as the third-longest funding lapse in modern US history.

The safe-haven demand for Silver could further weaken amid easing trade tensions between the United States (US) and China. US President Donald Trump said over the weekend that he wants China to buy soybeans at least in the amount they were buying before. Trump added that he believes China will make a deal on soybeans. "We can lower what China has to pay in tariffs, but China has to do things for us too," he added.

US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in the coming days to ease tensions ahead of a potential meeting between Presidents Trump and Xi later this month.