Silver price (XAG/USD) gains ground after registering around 2% losses in the previous session, trading around $37.80 per troy ounce during the European hours on Tuesday. The Silver attracts buyers after the US President Donald Trump announced late Monday to postpone the implementation of sweeping tariffs on China for an additional 90 days.

The decision came just hours before the previous agreement between the world's two largest economies was set to expire. In response, China's Commerce Ministry announced it would suspend additional tariffs on US goods for the same period, following Trump's executive order extending the tariff truce.

It is important to note that Silver is essential in various industrial applications, such as electronics, solar panels, and automotive components. Given China's status as one of the world's largest manufacturing hubs, the country's industrial demand for Silver is significant.

The non-interest-bearing Silver also draws support from rising odds of the Federal Reserve (Fed) delivering multiple rate cuts by the end of this year. Investors may shift toward precious metals seeking better returns on their investments as the cost of holding Silver is lower, making it more attractive.

The higher Initial Jobless Claims and lower July's Nonfarm Payrolls in the United States (US) have boosted the expectations for a Fed rate cut next month, with another possible move in December. Markets are now pricing in approximately 84% odds of a Fed rate cut at the September meeting, down from 90% a week ago, according to the CME FedWatch tool.

However, traders await the US consumer inflation data, due later in the North American session. Investors may adopt caution as the July US Consumer Price Index (CPI) is forecast to rise slightly, which could shape the Fed's policy outlook.

Source: FXstreet