Silver (XAG) Forecast: Key $31.81 Level in Focus as Tariffs Threaten Market Stability

Silver Steadies as Tariff Concerns Weigh, Key Level in Focus

Silver prices remained flat on Wednesday, struggling to find momentum after Tuesday’s 1.88% drop. The metal is hovering around a critical 50% retracement level at $31.81, which could define its near-term direction.

A break below this level could accelerate selling, pushing prices towards the 50-day moving average at $30.87 and potentially the 200-day moving average at $30.51. Alternatively, if silver reclaims $31.81, a rebound toward the 61.8% retracement level at $32.53 could be on the cards​.

At 12:37 GMT, XAG/USD is trading $31.78, up $0.03 or +0.10%.

Trump’s Tariffs Add Pressure to Silver

Silver’s outlook is closely tied to U.S. President Donald Trump’s tariff policies, with his recent probe into new copper tariffs stirring inflation fears. While inflation often boosts precious metals, silver’s dual role as an industrial metal complicates its response.

Tariffs could disrupt industrial demand, particularly if economic growth slows, making silver more vulnerable than gold in a trade dispute scenario. Traders are wary that while gold might gain from safe-haven flows, silver could face headwinds if broader economic activity stalls​​.

Gold’s Impact on Silver Market

Gold’s recent price action also influences silver. Gold steadied on Wednesday after a sharp 2% drop on Tuesday, having hit a record high of $2,956.31 on Monday. While profit-taking has cooled gold’s rally, the metal remains in a broadly bullish trend.

Any renewed strength in gold could support silver, especially if investors seek value in silver as a cheaper alternative. However, if gold struggles to break higher, silver may remain under pressure, particularly if industrial demand softens in response to economic data or escalating tariffs​.

Economic Data Could Be a Silver Wildcard

Upcoming U.S. economic data, including Friday’s Personal Consumption Expenditures (PCE) report, could sway silver prices. Inflationary pressures from tariffs may influence Federal Reserve policy, potentially impacting silver’s industrial demand outlook.

Rising Treasury yields and mixed economic indicators, such as weak consumer confidence and housing data, add uncertainty. Traders should watch for signals that could shift silver’s balance between safe-haven and industrial influences​.

Market Forecast: Silver Faces a Crucial Test

Silver’s ability to hold the $31.81 level is critical. A downside break could lead to more selling, while a recovery might create short-term buying opportunities.

With tariff uncertainty and key economic data on the horizon, silver traders need to stay agile, balancing the metal’s dual market drivers—safe-haven demand and industrial use.

How gold performs in this environment could also serve as a sentiment gauge, but silver’s path will ultimately depend on trade policy developments and economic signals.

More Information in our Economic Calendar.