Silver Price Forecast: XAG/USD plummets below $48 on US-China trade deal optimism

• Silver price plunges to near $47.80 as US-China trade deal optimism has diminished safe-haven demand.
• US Secretary Bessent expresses that Washington won't proceed with 100% additional tariffs on China.
• Soft US inflation paves the way for Fed interest rate cuts in policy meetings this month and December.

Silver price (XAG/USD) trades 1.5% lower, slightly below $48.00 during the late Asian trading session on Monday. The white metal faces selling pressure as the appeal of safe-haven assets has diminished on hopes that the United States (US) and China will reach a bilateral trade deal soon.

The optimism over the US-China trade deal increased following comments from US Treasury Secretary Scott Bessent stated that recently announced 100% additional tariffs by the White House on imports from Beijing won't proceed.

"No, I'm not, and I'm also anticipating that we will get some kind of a deferral on the rare earth export controls that the Chinese had discussed," Bessent said in an interview with NBC's "Meet the Press" program after he was asked whether the White House would continue with 100% additional tariffs threatened on China. These comments from Bessent came after his meeting with Chinese Premier He Lifeng at the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Malaysia over the weekend.

Signs of easing global trade tensions diminish the demand for safe-haven assets, such as Silver.

Meanwhile, intensified expectations of more interest rate cuts by the Federal Reserve (Fed) in the near term due to soft US Consumer Price Index (CPI) data for September are expected to offer relief to the Silver price. According to the CME Fedwatch tool, traders see a 94% chance that the Fed could reduce interest rates in each of its two policy meetings remaining this year.

Lower interest rates by the Fed bode well for non-yielding assets, such as Silver.

Silver technical analysis

Silver price retraces from the all-time high of around $54.85 posted last week. The near-term trend of the precious metal has become uncertain as it struggles to return above the 20-day Exponential Moving Average (EMA), which trades around $48.86.

The 14-day Relative Strength Index (RSI) slides below 60.00, suggesting that the bullish momentum has ended for now.

Looking down, the September 23 high of $44.47 would remain a key support. On the upside, the all-time high of $54.50 might act as key barrier.

Silver daily chart