Silver prices (XAG/USD) recovered from their latest decline from the previous session, rebounding toward a 14-year high of $39.13, reached on Monday (July 15th), and traded around $38.40 per troy ounce during the European session on Tuesday. Silver prices strengthened as traders remained cautious ahead of the June US Consumer Price Index (CPI) data, which may provide fresh insight into the Federal Reserve's monetary outlook.

Silver attracted sellers as Federal Reserve Chairman Jerome Powell indicated that inflation is expected to rise over the summer, driven by tariff-related pressures. This increased the likelihood that the Fed will delay cutting interest rates until later this year. Meanwhile, concerns about the Fed's independence resurfaced as President Trump again criticized Powell, insisting that interest rates should be at 1% or lower.

Furthermore, global trade concerns eased after Trump expressed his willingness to engage in further tariff negotiations with the European Union (EU) and other major partners. However, traders are likely to remain cautious following the US government's decision on Monday to immediately impose a 17% tariff on most fresh tomato imports from Mexico after negotiations ended without a deal to avoid tariffs.

However, demand for the safe-haven asset silver increased as geopolitical tensions resurfaced following US President Donald Trump's latest threat to impose "very heavy" tariffs on Russia if a peace deal is not reached within 50 days.

President Trump, along with NATO Secretary General Mark Rutte, also confirmed that European allies will purchase billions of dollars worth of American-made weapons. These weapons include the Patriot missile system, which will be transferred to Ukraine in the coming weeks to counter intensifying Russian attacks. (alg)

Source: FXstreet