03 Mar 2025

Silver prices experience a significant increase as a drop in US Personal Spending has led to heightened expectations for a dovish stance from the Federal Reserve. This week, market participants will closely monitor the Nonfarm Payrolls (NFP) data for February. Additionally, US President Trump is scheduled to implement tariffs on Canada, Mexico, and China on March 4.

During European trading hours on Monday, the price of silver (XAG/USD) rose nearly 1% to approximately $31.50. The appreciation of the white metal is attributed to the growing dovish sentiment surrounding the Federal Reserve, which has negatively impacted the value of the US Dollar (USD).

The US Dollar Index (DXY), which measures the dollar's performance against six major currencies, has resumed its downward trend after a three-day rally, falling to around 107.00.

According to the CME FedWatch tool, the probability of the Federal Reserve cutting interest rates in June has increased to 77%, up from 63% the previous week. It is widely anticipated that the Fed will maintain interest rates in the range of 4.25%-4.50% during the March and May policy meetings.

Traders have adjusted their positions in favor of a rate cut in June following the first decline in US Personal Spending in January in two years.

To gain further insights into the Fed's monetary policy direction, investors will focus on a range of US economic indicators, particularly the upcoming Nonfarm Payrolls (NFP) report.

In the meantime, concerns regarding President Trump's tariffs on Canada, Mexico, and China have heightened the appeal of safe-haven assets like silver. On March 4, Trump is expected to impose tariffs on these nations due to their alleged contributions to drug trafficking into the US.

From a technical perspective, silver prices have rebounded to nearly $31.50 during Monday's European session. However, the overall outlook for silver remains bearish as it trades below the 50-day Exponential Moving Average (EMA), which is situated around $31.80.

The 14-day Relative Strength Index (RSI) is currently within the 40.00-60.00 range, indicating a waning bullish momentum, although the bullish bias persists.

Looking ahead, the upward-sloping trendline originating from the August 8 low of $26.45 will serve as a crucial support level for silver prices around $3.