Silver Price Forecast: XAG/USD holds gains above $31.50 near two-month highs

• Silver price appreciates as traders assess the potential impact of uncertain US trade policies on the global economy.
• The US tariffs on Mexican and Canadian goods have been postponed for at least 30 days after two days of implementation.
• The non-interest-bearing Silver receives support amid dovish signals from major central banks.

Silver price (XAG/USD) continues its upward momentum, reaching near two-month highs and trading around $31.60 per troy ounce during Asian trading hours on Tuesday. Safe-haven metals, including Silver, are gaining ground as traders assess the potential impact of uncertain United States (US) trade policies on the global economy.

On Monday, US President Donald Trump announced a temporary suspension of tariffs on Mexico and Canada after their leaders agreed to deploy 10,000 troops to the US border to combat drug trafficking. The tariffs initially imposed two days earlier—25% on Mexican and Canadian goods have been postponed for at least 30 days. China stands alone in facing the new Trump levies. The world’s largest consumer of commodities is due to be hit with across-the-board tariffs of 10% that begin at 05.00 GMT on Tuesday.

Silver, a non-interest-bearing asset, continues to hold its gains amid dovish signals from major central banks. The Bank of Canada (BoC) has ended its quantitative tightening and joined Sweden’s Riksbank in cutting interest rates. Last week, the European Central Bank (ECB) lowered its Deposit Facility Rate by 25 basis points (bps) to 2.75%, and both the Reserve Bank of India (RBI) and the People’s Bank of China (PBoC) have indicated possible rate cuts ahead. Markets are also anticipating two rate cuts from the US Federal Reserve (Fed) this year.

Economic data released by the Institute for Supply Management (ISM) on Monday showed that the US Manufacturing PMI rose to 50.9 in January, up from 49.3 in December, surpassing expectations of 49.8. The stronger-than-expected data suggests renewed momentum in US factory activity, reinforcing Silver’s outlook as a key industrial metal, particularly in electrification technologies.

The Silver Institute recently projected a fifth consecutive year of significant market deficits for silver supply in 2025, driven by strong industrial demand and retail investment. These factors are expected to outweigh weaker consumption in the jewelry and silverware sectors.