Silver price (XAG/USD) has retraced its gains, trading around $30.30 per troy ounce during the Asian session on Monday. The non-interest-bearing metal faces challenges with the upcoming US Federal Reserve (Fed) policy decision this week. There is widespread anticipation that the Fed will maintain current interest rates, marking the first pause in the rate-cutting cycle that began in September.

The uncertainty surrounding US President Donald Trump's trade and immigration policies could prompt the Federal Reserve to remain cautious about cutting rates this year. Trump's policies are perceived as inflationary, which might lead the central bank to keep rates higher for a longer period, diminishing the appeal of Silver.

Additionally, concerns about the recent rebound in the US Dollar (USD) are pressuring the precious metals including Silver. The Greenback has regained some strength amid renewed tariff concerns after Trump announced plans to impose tariffs and sanctions on Colombia, following the country's refusal to allow US military planes carrying deported migrants.

However, in a surprising turn of events, the White House announced that Colombia has agreed to all terms, easing some of the tensions. Colombia's Foreign Minister confirmed that the "impasse with the US has been overcome."

The Wall Street Journal (WSJ) reported growing momentum among Trump's advisers to impose 25% tariffs on Mexico and Canada starting February 1. Trump's advisers are adamant about not waiting for negotiations or talks.

Source : Fxstreet