- Silver prices advance as dollar-denominated metals become more affordable, supported by a weaker US Dollar.
- The gray metal finds support in safe haven flows as tensions in the Russia-Ukraine conflict escalate.
- Non-yielding assets ran into headwinds after Fed Chair Jerome Powell lowered expectations of imminent rate cuts.
The price of Silver (XAG/USD) continues to gain ground for the second day in a row, trading around $31.40 per troy ounce during the Asian session on Tuesday. Dollar-denominated Silver prices recover from two-month lows as the US Dollar (USD) experiences profit-taking selling following a recent rally. This rally was driven by expectations of fewer rate cuts from the Federal Reserve (Fed) and optimism about US economic performance under the incoming Trump administration.
Meanwhile, safe-haven Silver is gaining traction amid rising geopolitical tensions. US President Joe Biden authorized Ukraine to use US-made weapons for deep strikes inside Russia, a move that raised concerns in the region. In response, the Kremlin issued a warning on Monday, promising retaliation against what it called a reckless decision by the Biden administration. Russia had previously warned that such actions could significantly increase the risk of confrontation with NATO.
Non-yielding assets like Silver faced headwinds after Fed Chair Jerome Powell tempered expectations for immediate rate cuts. Powell emphasized the strength of the economy, a robust labor market and ongoing inflationary pressures. He stated, “The economy is not sending any signal that we need to rush to lower rates.” Investors now await additional comments from Fed officials this week for more information on the path of US interest rates.
Markets are closely monitoring China’s upcoming Lending Prime Rate (LPR) decision, anticipating possible additional stimulus measures to support economic growth. This follows the recent 10 trillion yuan debt package, which did not include direct economic stimulus, raising market concerns. As one of the world’s largest manufacturing centers for electronics, solar panels and automotive components, China’s industrial demand for Silver remains a key factor influencing its prices.
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.
