Silver Price Forecast: XAG/USD attracts some sellers below $27.00 amid risk-on sentiment

• The price of Silver extends its downward trend near $26.95 on Tuesday.
• Easing fears of rising tensions in the Middle East improve market sentiment.
• Speculation about a reduction in the Fed's interest rate cuts boosts the Dollar and drags the white metal down.

The price of Silver (XAG/USD) is trading lower for the second day in a row around $26.95 on Tuesday during the early hours of the European session. Traders prefer to stay on the sidelines pending preliminary US Purchasing Managers' Index (PMI) data for April, due out later on Tuesday.

The price of Silver falls sharply to near three-week lows as concerns over a possible broader conflict in the Middle East fade, leading traders to reduce their positions in precious metals in favor of higher-value assets. risk. Iranian Foreign Minister Hossein Amirabdollahian declared on Friday that Iran does not plan to respond to Israel's retaliatory attack, while Israeli authorities remained largely silent. The lack of subsequent public statements tends to imply that both sides are trying to de-escalate tensions.

Furthermore, the lower expectation of interest rate cuts by the US Federal Reserve (Fed), US economic data and the hawkish stances of policymakers provide some support to the US Dollar (USD) and weigh on the Silver. New York Federal Reserve President John Williams said he feels no urgency to cut interest rates given the strength of the economy. Meanwhile, Chicago Federal Reserve President Austan Goolsbee said the Fed's current tight monetary policy is appropriate given strong U.S. economic data.

The probability of a June cut has fallen to 15%, and that of a July cut has fallen below 45%. A cut in September is not entirely discounted, as the probability falls below 70%, according to CME's FedWatch tool.