- Silver price plunges almost 2% to near $32.80 as US-EU trade tensions ease.
- The US Dollar gains as the EU and the US progress towards reaching a trade deal.
- US President Trump suspended 50% tariffs on the EU until July 9.
Silver price (XAG/USD) dives almost 2% to near $32.80 during North American trading hours on Tuesday. Investors have dumped the white metal as trade tensions between the United States (US) and the European Union (EU) have eased, with President Donald Trump postponing 50% tariffs on the trading bloc to July 9 from June 1.
Signs of easing US-EU trade uncertainty have diminished demand for safe-haven assets, such as Silver.
Meanwhile, the US Dollar (USD) has gained sharply as Washington and Brussels have increased efforts to reach a bilateral deal, potentially impacting the Silver price. During European trading hours, a report from Reuters showed that European officials have asked domestic firms to share their plans for investment in the US. Technically, a higher US Dollar makes the Silver price an expensive bet for investors.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to near 99.35 after attracting bids near the monthly low of 98.70 posted on Monday.
The US Dollar should have shown strength on Monday as Trump’s decision to suspend 50% EU tariffs came over the weekend. However, it remained on the backfoot due to the holiday in the US on account of Memorial Day.
Analysts at Commerzbank said, “I would guess strength in the US Dollar is because Trump retreated over the weekend. Yesterday, markets were closed, so there was only a small move. Now, with the UK being back, it’s a recovery of the move we saw on Friday.”
Silver technical analysis
Silver price ranges between $31.65 and $33.70 for a month. The near-term trend of the white metal is uncertain as it wobbles around the 20-period Exponential Moving Average (EMA), which trades near $32.87.
The 14-period Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sideways trend.
Looking up, the March 28 high of $34.60 will act as key resistance for the metal. On the downside, the April 11 low of $30.90 will be the key support zone.
Silver daily chart
