Silver (XAG/USD) traded marginally higher on Monday (5/19), holding above the $32.00 level during the US session, as broader US Dollar (USD) weakness fueled demand for alternative safe-haven assets.

The move came in response to Moody's downgrade of the US sovereign credit rating, which has added to market concerns over fiscal sustainability and long-term growth prospects.

At the time of writing, Silver prices were up 0.05% on the day, with spot XAG/USD last seen trading around $32.30. The metal is attempting to reclaim the 50-day Simple Moving Average near $32.75, which has capped gains in the past few sessions.

Moody's US debt downgrade triggers dollar weakness

On Friday, Moody's Investors Service downgraded the US sovereign debt rating from AAA to AA1, citing growing concerns over its ballooning debt levels, policy uncertainty and the long-term impact of high interest rates. It marked the latest major agency to downgrade the US sovereign rating, raising concerns over its fiscal path and the potential long-term drag on economic growth.

The US dollar has since come under pressure, with the US Dollar Index (DXY) falling as investors reassessed the greenback's position as the world's leading safe-haven currency.

With silver priced in US dollars, the relative weakness of the USD has boosted the precious metal's appeal.

Tariff threats, trade uncertainty and Fed policy changes keep silver in focus

Ongoing geopolitical tensions and tariff threats from the Trump administration have also weighed on sentiment.

The White House reiterated over the weekend that higher tariffs could be reimposed on countries that do not negotiate in "good faith", fueling concerns over trade tensions and global supply chains.

Meanwhile, market focus shifts to a series of Federal Reserve (Fed) speeches this week.

Five Fed officials are scheduled to speak on Monday, with traders looking for clues on the trajectory of interest rates and whether the Fed will maintain its restrictive stance amid rising fiscal and political uncertainty. (Newsmaker23)

Source: FXstreet