Silver trades lower as US deals ease tariff uncertainty, NFP eyed

Silver is down 0.5% to near $36.50 during the European trading session on Friday. The white metal faces selling pressure as the confirmation of tariff deals by the US with a number of its key trading partners, such as Japan, the European Union, South Korea and others.

Also, increasing investors’ confidence that Washington will reach an agreement with China have diminished demand for safe-haven assets, such as XAGUSD.

Safe-haven assets performed strongly since the announcement of the tariff policy by President Trump, which aimed to reduce wide fiscal deficit of the nation. The demand for these assets increased as investors became worried that the protectionist policy could lead to a damaging global trade war.

Theoretically, heightened global economic tensions improve demand for safe-haven assets.

Meanwhile, a strong rally by the US dollar has also weighed on the price of silver. The DXY Dollar Index, which tracks the greenback’s value against six major currencies, trades firmly near a fresh two-month high around 100.00.

Technically, a higher dollar makes silver an expensive bet for investors.

The dollar has strengthened as traders pare bets supporting interest rate cuts by the Federal Reserve in the September meeting due to upbeat Q2 Gross Domestic Product, hot Personal Consumption Expenditure inflation (PCE) report for June, and signals from Chairman Jerome Powell that there is no rush for interest rate cuts.

Higher interest rates by the Fed bode poorly for non-yielding assets, such as silver.

In Friday’s session, investors will focus on the US Nonfarm Payrolls (NFP) data for July.

XAGUSD charts by TradingView