- Silver price erases Thursday’s losses by rising almost 2% on Friday.
- US economic data for September justify the Fed’s rate hike of 75 basis points.
- US consumer sentiment improved, showing the resilience of US citizens despite the worsening economic outlook.
the price of silver rose as Wall Street closes, gaining 1.85% for the day, triggered by a weakening US dollar, while US Treasury yields stalled. Positive US economic data eases investors’ concerns that the Federal Reserve will hike 100 basis points instead of 75 at next week’s meeting, while a risk-off push keeps income global variable in red numbers. At the time of writing, XAG/USD is trading at $19.54, breaking above the $19 level again.
XAG/USD Rises as US Treasury Yields Flat as US Dollar Weak
Earlier, US economic data revealed that US consumer sentiment continued to improve, despite growing fears that US central bank tightening could trigger a recession in the country. The reading came in at 59.5, below estimates but above the previous month’s reading of 58.6.
“Following the notable improvement in sentiment in August, consumers showed signs of uncertainty about the path of the economy.” Inflation expectations in the same report for one year fell to 4.6% from 4.8% in August,” said Joanne Hsu, director of the UM survey.
Meanwhile, the dollar fluctuates during the session, about to end unchanged. The dollar index is down 0.02% to 109.718, while the benchmark 10-year US bond rate stands at 3.449%, almost unchanged.
These factors mentioned above reinforced the appetite for the unprofitable metal, gaining traction and extending its weekly gains to 3.86%.
Apart from this, the US data released during the current month is giving the green light to Fed officials to raise rates by ¾ point to the 3-3.25% range. Although there has been speculation that the Fed may raise 100 basis points, analysts at Societe Generale think otherwise.
“The FOMC meets on September 21 and we expect a third rate hike of 75 basis points. There has been talk of 100 basis points, but Fed officials have rejected this option before and we don’t expect them to adopt it now.” longer term, the extension of the SEP to 2025 offers much more insight into its view of the business cycle,” Societe Generale analysts wrote.
Technical levels
Source: Fx Street
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