Silver (XAG/USD) price is trading near a monthly high of $33.40 during North American trading hours on Thursday (3/13). The white metal is gaining as easing US consumer and producer inflation pressures pave the way for the Federal Reserve (Fed) to cut interest rates at its June policy meeting.

The US Producer Price Index (PPI) report showed that headline and core producer inflation slowed at a faster-than-expected pace to 3.2% and 3.4%, respectively, in the 12 months to February. The headline PPI remained flat month-on-month while the core figure declined by 0.1%.

On Wednesday, the US headline and core Consumer Price Index (CPI) rose by 2.8% and 3.1%, respectively, in February, slower than forecasts and previous releases.

Last week, Fed Chair Jerome Powell stated that tight monetary policy would not last long "if the labor market suddenly weakens or inflation falls more than expected". The Fed's lower interest rate scenario bodes well for non-yielding assets, such as Silver.

On the global front, rising economic risks due to US President Donald Trump's tariff agenda have also boosted the safe-haven demand for Silver prices. On Wednesday, Trump confirmed that he would respond to retaliatory tariffs from the European Union (EU). Such a scenario would result in an EU-US trade war, which would significantly dampen investors' risk appetite.

Cautious market sentiment has also boosted the safe-haven demand for the US Dollar (USD), but US economic risks and a weak CPI report have capped its gains. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, rose to near 103.80 from a four-month low of 103.20, recorded on Tuesday. (Newsmaker23)

Source: FXstreet