Silver price slides over 2% to near $35.85 during European trading hours on Friday. The white metal faces a sharp selling pressure due to improvement in trade relations between the United States (US) and China and no signs of Israel-Iran truce violation.

During the European trading session, a spokesperson from the Chinese Ministry of Commerce confirmed that Beijing has agreed to expedite exports to rare earths to the US, while Washington will revoke non-tariff barriers.

On Thursday, US Commerce Secretary Howard Lutnick also confirmed that China is going to "deliver rare earths to us" and "we'll [Washington] take down our countermeasures", Bloomberg TV reported.

Another reason behind severe weakness in the Silver price is the stability in ceasefire between the two Middle East nations since the announcement on earlier this week. US President Donald Trump announced a truce between Israel and Iran, and urged them not to violate the same.

The scenario of easing geopolitical tensions and global economic uncertainty diminishes the appeal of safe-haven assets, such as Silver.

Meanwhile, an increase in Federal Reserve (Fed) dovish bets due to tensions between Donald Trump and Chair Jerome Powell regarding the monetary policy stance has failed to offer support to the Silver price. Fed dovish bets escalate as investors expect Trump's preferred Powell's successor will support his economic agenda.

Theoretically, lower interest rates by the Fed bode well for non-yielding assets, such as Silver.

Source: FXStreet