On Monday, May 27, silver prices (XAG/USD) dropped over 1%, nearing the $33.00 level, marking a notable silver price drops period. The decline was driven by a strengthening U.S. dollar and a modest rebound in risk appetite following President Trump’s announcement to postpone new trade tariffs.

Key Silver Price Levels

Educational Insight: Why Does Silver React to the Dollar and Risk Sentiment?

Like gold, silver is a non-yielding safe-haven asset, meaning its demand typically rises during risk-off environments. In contrast, during risk-on conditions—like today—investors tend to favor higher-risk assets such as equities.

🔍 Additionally, since silver is priced in U.S. dollars, a stronger dollar makes silver more expensive for foreign buyers, which puts downward pressure on demand and price.

Macro Drivers Impacting Silver and the Dollar

President Trump’s decision to delay the 50% tariff on EU imports until July 9 eased immediate market concerns, reducing the demand for safe-haven assets like silver.

Meanwhile, the U.S. dollar strengthened against most major currencies—especially the Australian dollar (up 0.48%) and the Japanese yen (up 0.40%)—which further pressured silver prices.

However, concerns surrounding the Trump tax cut bill, which is expected to push the U.S. budget deficit to $3.8 trillion, may cap dollar strength and potentially support silver prices in the medium term.

Read More: Silver in Financial Markets

Summary: Opportunities and Risks

🔹 Opportunities:

• Technical support near $32.90–$33.00 could trigger a rebound
• U.S. fiscal stress and potential medium-term dollar weakness favor precious metals
• A breakout above $33.70 may activate targets at $34.15 and $34.60

🔸 Risks:

• Continued risk-on sentiment in equity markets may extend silver’s downward pressure
• A break below $32.90 could lead to declines toward $32.15 and $31.74
• Market focus on U.S. fiscal policy could cause increased volatility for both the dollar and silver

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