- Silver prices hold onto gains as investors remain cautious ahead of US Consumer Price Index (CPI) data due on Thursday.
- Fed’s Powell’s neutral comments on Wednesday provided support for non-yielding silver.
- Renewed Israeli attacks could hamper efforts to negotiate a ceasefire agreement and increase demand for silver as a safe haven.
Silver (XAG/USD) price is gaining ground for the third consecutive session, trading around $31.00 per troy ounce during Asian hours on Thursday. This rise could be attributed to investor caution ahead of the release of the upcoming US Consumer Price Index (CPI) data for June, scheduled for Thursday, to gain more clarity on the direction of the Federal Reserve’s (Fed) monetary policy. Higher interest rates negatively impact the demand for non-yielding assets like Silver.
Market forecasts generally predict that the annualized US core CPI for the year ending June will remain stable at 3.4%. Meanwhile, headline CPI inflation is expected to rise 0.1% month-on-month in June, compared with the previous flat reading of 0.0%.
Meanwhile, on Wednesday, Federal Reserve (Fed) Chairman Jerome Powell stressed the importance of closely monitoring the labor market, highlighting its significant deterioration. In addition, Powell expressed confidence in the downward trend of inflation, following his comments on Tuesday emphasizing the need for more data to strengthen confidence in the inflation outlook.
Additionally, Fed Chair Powell stressed on Tuesday that a “policy rate cut is inappropriate until the Fed has greater confidence that inflation is sustainably headed toward 2%.” He also noted that “first quarter data did not support the increased confidence in the path of inflation that the Fed needs to cut rates.”
On the geopolitical front, Israeli forces carried out an offensive in northern and central Gaza on Tuesday, including an airstrike on a tent camp, Reuters reported. Palestinian officials said at least 29 people, mostly women and children, were killed in the attack. The incident occurred as onlookers gathered on the grounds of a school in Abassan, east of Khan Younis, where vendors were selling milkshakes and biscuits.
This development has raised concerns about a possible escalation in the Middle East conflict and has increased the appeal of safe haven assets such as silver. Hamas, the militant group, has warned that renewed Israeli attacks could disrupt efforts to negotiate a ceasefire in the Gaza conflict, with discussions scheduled to resume in Doha on Wednesday.
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.
