Silver prices (XAG/USD) continue to decline for the second consecutive day, hovering around $32.80 per troy ounce during the Asian session on Monday. The precious metal faces pressure as improving trade relations between the United States (US) and China diminish its appeal as a safe-haven asset.
On Friday, reports revealed that China had exempted certain US imports from its steep 125% tariffs, sparking hopes that the prolonged trade dispute between the two largest economies in the world could be nearing a resolution. Additionally, US Agriculture Secretary Brooke Rollins confirmed on Sunday that the Trump administration is engaging in daily discussions with China regarding tariffs.
However, conflicting signals persist. A Chinese embassy spokesperson told Reuters on Friday that no tariff negotiations are taking place, urging Washington to “stop creating confusion.” Furthermore, a Beijing official reiterated on Thursday that no “economic and trade negotiations” are underway and emphasized that the US must “completely cancel all unilateral tariff measures” for talks to resume.
In the meantime, the US Dollar (USD) has strengthened, further pressuring dollar-denominated commodities like silver. The US Dollar Index (DXY), which tracks the USD against a basket of six major currencies, rose for the second consecutive session, trading near 99.70. The Federal Reserve (Fed) remains in a blackout period ahead of its Federal Open Market Committee (FOMC) meeting scheduled for May 7.
Looking ahead, traders are focused on key US economic releases this week, including the preliminary Q1 GDP report, March PCE inflation data, and April jobs figures. These data points will be crucial in determining the Fed’s next policy moves and shaping the broader economic outlook.
