- The price of Silver may regain its ground as lower US Treasury yields increase the attractiveness of the precious metals.
- Non-yielding Silver may be appreciated as multiple banks are widely expected to make interest rate cuts.
- La Plata safe haven may strengthen as Israel intensifies its airstrikes in Lebanon.
The price of Silver (XAG/USD) falls slightly after two days of gains, trading around $31.60 per troy ounce during the Asian session on Thursday. However, non-yielding Silver received support from lower US Treasury yields. The 2-year and 10-year US Treasury yields stand at 3.94% and 4.03%, respectively, at the time of writing.
Market expectations lean towards a total of 125 basis points in rate cuts by the US Federal Reserve (Fed) over the next year. According to the CME FedWatch tool, there is a 94.1% probability of a 25 basis point rate cut in November. Lower interest rates increase the attractiveness of precious metals like Silver.
Additionally, the European Central Bank (ECB) is widely expected to announce a 25 basis point reduction in both the Main Refinancing Operations and the Deposit Rate at its policy meeting later in the day. Recent inflation data also suggests that the Bank of England (BoE) and the Reserve Bank of New Zealand (RBNZ) could follow suit with possible rate cuts next month.
Silver prices could receive additional support from safe haven flows due to escalating tensions in the Middle East. On Wednesday, Israel intensified its airstrikes in Lebanon, including an attack that destroyed the municipal headquarters of a major city, resulting in the deaths of 16 people, including the mayor. This is the largest attack on an official Lebanese state building since the start of the Israeli air campaign, according to Reuters.
US President Joe Biden is signaling a new willingness to leverage US military assistance to Israel, using it as both an incentive and a deterrent in his critical confrontation with Iran and Iranian-backed militant groups. This strategy could increase Washington’s influence over Israeli decision-making.
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.
