Silver (XAG) Forecast: Tariff-Driven Macro Tensions May Reignite Haven Demand

Silver Under Pressure but Macro Tailwinds Keep Bulls in Play

Silver started the week strong as investors leaned into safe-haven trades, but a midweek reversal in gold and renewed dollar strength weighed on the market. Despite the pullback, silver remains supported by deepening macro stress, persistent inflation concerns, and safe-haven rotation tied to geopolitical and monetary tensions.

Last week, XAG/USD settled at $32.52, up $0.21 or +0.65%.

Technically, the longer-term trend is higher with the market trading on the strong side of the 52-week moving average at $30.60. This indicator will control the direction of the market this week.

Upside momentum is strong  with traders casting their eyes on $34.59 to $34.87.

Gold Reversal Dampens Momentum, But Not the Case for Silver

After gold surged to an all-time high, profit-taking set in, dragging down silver in tandem. The broader pullback across precious metals was not driven by a change in macro conditions but rather position squaring and technical selling. Silver’s pullback came despite the same bullish drivers still in play: central bank caution, geopolitical uncertainty, and investor hedging against fiscal instability.

Trade War Risks Escalate—but Silver Holds a Unique Edge

A dramatic tariff escalation between the U.S. and China drove safe-haven flows early in the week. U.S. tariffs on Chinese goods jumped from 104% to 245%, with China retaliating in kind. Silver, notably, was excluded from these measures—highlighting its unique position in global markets. As both a monetary asset and industrial input, silver’s exemption protects supply continuity and enhances its appeal during trade disruptions.

Fed Credibility in Question as Powell-Trump Feud Deepens

President Trump’s public threats toward Fed Chair Powell have triggered fresh doubts about the central bank’s independence. Traders are beginning to price in the possibility of policy being influenced by political motives. This perception raises the odds of future rate cuts and weakens confidence in the U.S. dollar—two fundamental drivers that tend to benefit silver. Inflation pressures from tariffs further reinforce the precious metals thesis, even as policymakers tread lightly.

Gold-to-Silver Ratio Suggests Room for Catch-Up

The gold-to-silver ratio remains historically elevated, pointing to silver’s relative undervaluation. As central bank credibility comes under scrutiny and institutional demand rises for uncorrelated hedges, silver could attract more capital. The metal offers investors both inflation protection and geopolitical insurance at a discount compared to gold.

Market Forecast: Macro Tension Keeps Silver in Play

Looking ahead, silver is positioned to benefit from ongoing macro stress. Safe-haven demand remains firm as trade tensions deepen and political interference in monetary policy raises alarm bells. With inflationary pressure from tariffs building and institutional confidence in the Fed eroding, silver’s role as a hedge grows more important. Traders focused on macro conditions rather than technical noise may find silver an increasingly attractive allocation in the week ahead.

More Information in our Economic Calendar.