Silver (XAG) Forecast: Can Bulls Push Past $31.81 Resistance for a Breakout?

Silver Holds Steady—Will Trade War Uncertainty Keep It Supported?

Silver is holding firm as traders assess the latest developments in the U.S.-China trade war. While silver itself is not directly impacted by tariffs, broader market uncertainty continues to drive safe-haven demand.

China, a major industrial consumer of silver, has been indirectly influencing the market despite being left out of the latest round of tariffs. With Chinese markets closed for the Lunar New Year, traders are anticipating fresh signals when trading resumes.

Technically, silver is testing key resistance at $31.81, a level that has held for four straight sessions. A break above this could push prices toward $32.33, with the multi-year high at $34.35 as the next major upside target.

At 13:20 GMT, XAG/USD is trading $31.73, up $0.15 or +0.47%.

Is the Trade War Boosting Silver’s Appeal?

Silver remains in demand as a hedge against uncertainty, with the trade war showing no signs of easing. China has responded to new U.S. tariffs with retaliatory measures, adding to concerns over prolonged economic disruptions.

While tariffs on Mexico and Canada have been temporarily paused, fears of broader economic fallout remain. The Federal Reserve has also flagged rising tariffs as a potential inflationary risk, which could complicate future monetary policy.

Since silver is often viewed as a hedge against inflation, ongoing trade tensions and supply chain disruptions could continue to provide support.

Will Treasury Yields and Jobs Data Impact Silver?

U.S. Treasury yields were mixed on Tuesday as traders weighed the impact of trade policy and upcoming economic data. The 10-year yield edged higher, while the 2-year yield remained stable.

All eyes are now on U.S. employment data, which could offer insights into labor market strength. Weak numbers could fuel expectations of rate cuts, making silver more attractive. On the other hand, strong jobs data could push yields higher and limit silver’s upside.

Can the U.S. Dollar Keep Silver in Check?

The U.S. dollar remains firm as trade war uncertainty continues to dominate sentiment. While the tariff pause on Mexico and Canada provided temporary relief, new duties on Chinese imports have added fresh pressure.

The Chinese yuan weakened slightly in offshore trading, while the Australian dollar—often tied to China’s economic health—also declined. Meanwhile, the euro edged lower on fears that Europe could be the next target of U.S. trade measures.

Higher inflation expectations could further strengthen the dollar, which may cap silver’s gains in the near term.

Market Outlook: Can Silver Break Through Resistance?

Silver’s outlook remains positive, supported by trade war concerns, inflation risks, and overall market uncertainty. Traders are watching key U.S. economic data, which could drive near-term price action.

If inflation worries persist and global uncertainty deepens, silver could see increased safe-haven demand. However, a stronger dollar and firm job data may limit gains. For now, silver remains in a critical range, with $31.81 as a key pivot level to watch.

More Information in our Economic Calendar.