Silver (XAG/USD) prices extended their decline for the second straight session, trading around $30.30 an ounce during Asian trading hours on Monday (1/20). The safe-haven metal is facing challenges amid easing tensions in the Middle East. On Sunday, Hamas and Israel exchanged hostages and prisoners, marking the first day of a ceasefire after 15 months of conflict.

Hamas released three female hostages in exchange for 90 Palestinians imprisoned in Israel, according to Bloomberg. In return, for the three Israeli hostages released, Hamas agreed to release 90 prisoners and detainees, all of whom are believed to be women and children, as reported by the Detainees Affairs Commission.

Traders are taking a cautious approach ahead of President-elect Donald Trump's inauguration later in the day. His proposed trade tariffs are expected to drive up inflation, potentially triggering a trade war and increasing Silver's appeal as a hedge against inflation.

Concerns are growing over Trump's policy proposals, such as potential tariffs, tax cuts and deportations of undocumented immigrants. Analysts expect the US Federal Reserve's (Fed) future interest rate decisions to depend heavily on how these policies are implemented.

Last week's weaker-than-expected US inflation data has revived expectations of further interest rate cuts by the Federal Reserve this year. Lower interest rates reduce the opportunity cost of holding non-interest-bearing Silver, increasing its appeal. (AL)

Source: FXstreet