Silver (XAG) Forecast: Will Trump Win Prompt Bigger China Stimulus and Silver Gains?

Silver Prices Poised for Movement as U.S. Election and China’s Stimulus Plans Unfold

Silver prices edged higher Monday, with traders eyeing two critical developments: the U.S. presidential election and anticipated stimulus measures from China. The market’s sensitivity to these events reflects expectations of significant shifts in demand drivers and potential price volatility in the coming days.

Silver, currently supported at $32.49 per ounce, has experienced minor gains after two consecutive weeks of losses following an October peak of $34.87. This week’s unfolding events could decide whether the metal regains momentum or tests new support levels.

At 12:53 GMT, Silver (XAG/USD) is trading $32.81, up $0.36 or +1.10%.

Election Uncertainty and Its Impact on Precious Metals

The U.S. presidential race, tightly contested between Democratic candidate Kamala Harris and Republican incumbent Donald Trump, is keeping investors cautious across asset classes. Market sentiment around gold—a leading indicator for precious metals—suggests a Trump victory could spur demand as his economic policies are perceived as inflationary, potentially driving gold towards $35.40. A Harris win, however, might temper inflation concerns, causing a more subdued response in metals markets as her policies are seen as continuing the Biden administration’s current economic approach.

Alongside election jitters, the Federal Reserve is set to meet Thursday, with traders anticipating a 0.25% rate cut, which could further influence silver demand. Fed Chair Jerome Powell’s remarks will be closely monitored for guidance on future policy direction, especially if weaker economic indicators suggest the need for additional cuts. With the U.S. dollar down 0.6% and at a two-week low, the weaker dollar environment supports precious metals, as dollar-priced assets like silver and gold become more attractive to international buyers.

China’s Stimulus Decisions Expected to Support Metal Demand

The Chinese government is expected to announce new fiscal measures at the close of this week’s National People’s Congress meeting, aiming to counter domestic economic challenges. The size and scope of China’s fiscal response may vary depending on the U.S. election outcome, as analysts believe a Trump win could prompt a larger package to offset potential tariffs or trade pressures. A larger stimulus package would likely boost industrial demand for silver, as China’s extensive use of the metal in electronics and manufacturing aligns with growth-driven fiscal measures.

China’s National People’s Congress meeting is particularly relevant for the silver market, as an increase in stimulus could drive consumption and infrastructure investments, indirectly supporting silver prices. China’s response to U.S.-China trade relations is also expected to shape yuan stability, which could impact global silver trade flows. Increased tariffs under a Trump administration, for instance, would likely lead China to bolster domestic demand, thereby driving greater demand for metals in infrastructure projects.

Market Forecast: Bullish Potential on Election and Stimulus Outcomes

As silver remains above its $32.49 support level, the market shows potential for upside depending on the election outcome and China’s policy announcements. Should Trump secure re-election, his inflationary approach could lift silver alongside gold as a hedge, pushing prices toward recent highs. In the event of a larger-than-expected stimulus package from China, silver’s industrial demand may rise, offering additional price support.

Traders should watch closely for these developments, as silver could revisit the October high of $34.87 if positive momentum is sustained. Conversely, a return to $31.21 is possible if support levels break, underscoring the potential for volatility this week.