Silver price (XAG/USD) edges lower to near $38.80 during the early European session on Tuesday. Still, the white metal is close to its decadal high around $39.00. The outlook of the white metal remains bullish on upbeat demand for safe-haven assets as concerns over global trade flow continue to persist.

Escalating trade tensions between the United States (US) and the European Union (EU) have raised trade tensions across the globe, given the scale of business between both economies. EU officials are preparing for countermeasures to offset the impact of additional tariffs imposed by the US, while struggling to reach a deal.

On Monday, Germany joined its European peers and pressed for a tougher stance on Washington as US President Donald Trump demanded a higher baseline tariff rate for signing a trade deal. "If they want war, they will get war," Bloomberg reported.

Over the weekend, a report from the Wall Street Journal (WSJ) showed that President Trump is eyeing a higher baseline tariff rate in a range between 15% and 20% against 10% as previously stated. The report also showed that Trump is least interested in waiving 25% tariffs on automobiles.

Theoretically, heightened global trade tensions increase demand for safe-haven assets, such as Silver.

Meanwhile, growing expectations for the Federal Reserve (Fed) to keep interest rates in the current range of 4.25%-4.50% for longer have failed to weigh on the Silver price. Higher interest rates by the Fed for longer bode poorly for non-yielding assets, such as Silver.

Source: FXstreet