- Silver price is trading in negative territory around $31.25 in early Asian trading on Friday, down 0.75% on the day.
- Fed rate cut hopes and safe haven flows add shine to Silver.
- Firm demand for the US dollar and the Fed’s hawkish stance could limit the white metal’s upside.
Silver (XAG/USD) price is attracting some sellers near $31.25, snapping the three-day winning streak during early European trading hours on Friday. The white metal is paring gains amid the Dollar’s ​​modest recovery. However, the downside could be limited as traders increase their bets for a Federal Reserve (Fed) rate cut in September.
The US Bureau of Labor Statistics (BLS) revealed on Thursday that the US Consumer Price Index (CPI) rose 3.0% year-on-year in June, compared with a 3.3% increase in May. This figure was below the market consensus of 3.1%. On a monthly basis, the CPI declined 0.1% month-on-month in June, the lowest level in more than three years.
Financial markets saw a nearly 85% chance of a Fed rate cut in September, up from 73% before the CPI report, according to the CME Group’s FedWatch tool. Rising hopes for rate cuts by the U.S. central bank are fueled by softer inflation data recently and a weaker Services Purchasing Managers’ Index (PMI).
Additionally, geopolitical risks and political uncertainty in the US and Europe could boost safe-haven flows, which benefits silver. Also, concerns over global economic slowdown also lift the white metal as traders look for safe haven destinations to place their funds.
On the other hand, renewed demand for the Dollar and the hawkish message from Fed officials could drag the price of Silver lower. Fed Chairman Jerome Powell stressed on Wednesday before the US House of Representatives Financial Services Committee that it would not be appropriate to cut the policy rate until they gain greater confidence that inflation is heading sustainably towards the Fed’s 2% target.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
