Silver Price Forecast: XAG/USD extends decline near $29.00 amid China’s demand concerns

• Silver price trades in the negative territory around $29.00 for the fifth straight day on Tuesday, down 0.35% on the day. 
• China’s demand concerns exert some selling pressure on the XAG/USD. 
• The Fed's potential interest rate cuts and political uncertainty might cap Silver’s downside. 

Silver price (XAG/USD) extends downside near $29.00 during the Asian session on Tuesday. The white metal edges lower amid a slowing Chinese economy. Investors will take more cues from the key US economic data later this week, including the first reading of the US S&P Global Purchasing Managers Index (PMI) for July, Gross Domestic Product (GDP) for the second quarter and the Personal Consumption Expenditures Price Index (PCE) data for June.

Industrial demand concerns from China’s economic slowdown continue to undermine Silver price in the previous sessions. The Chinese GDP for Q2 was weaker-than-expected and Retail Sales increased at the slowest pace since 2022. It’s worth noting that China is a major consumer of industrial metals, and China’s economic slowdown could weigh on the Silver price. 

On the other hand, the rising bets on Federal Reserve (Fed) rate cuts in September might lift the white metal. New York Fed President John Williams and Fed Governor Christopher Waller noted that the Fed is getting “closer” to where it wants to be in terms of rate cuts. 

According to the CME FedWatch Tool, traders in the Fed Funds Futures markets have fully priced in rate cuts in September, with at least two quarter-point cuts in 2024. Furthermore, political uncertainty after US President Joe Biden’s withdrawal from the 2024 election might support Silver for the time being.