Key Takeaways
- Silver price is rising due to increased expectations of a Fed rate cut, reducing the cost of holding bullion assets.
- Federal Reserve Atlanta President Raphael Bostic hints at possible rate cuts in September.
- Israel’s military and Hamas agree to ceasefires in Gaza for polio vaccinations, but tensions remain high with deadly clashes reported.
Silver Price Gains Ground Amid Fed Rate Cut Expectations
Silver price (XAG/USD) continues to climb, reaching around $29.50 per troy ounce during the Asian trading session on Friday. The non-yielding Silver is benefiting from a decreased opportunity cost as anticipation grows for a Federal Reserve interest rate cut in September. Investors are closely watching the upcoming release of July’s US Personal Consumption Expenditure (PCE) Price Index for insights into future interest rate trends.
Federal Reserve Atlanta President Raphael Bostic, known for his hawkish stance, has suggested that it may be time to consider rate cuts due to cooling inflation and higher-than-expected unemployment. However, he remains cautious, awaiting confirmation from upcoming reports before the September FOMC meeting.
Meanwhile, on the geopolitical front, safe-haven silver may face challenges as Israel’s military and Hamas agree to temporary truces in Gaza for polio vaccinations. Despite the pauses in fighting, tensions remain high with deadly clashes reported in the West Bank.
Silver FAQs
Silver is a valuable metal often traded by investors seeking diversification or a hedge against inflation. It can be purchased as physical coins or bars, or traded through Exchange Traded Funds. Silver prices are influenced by various factors, including geopolitical instability, interest rates, currency movements, and industrial demand.
The metal is widely used in industries like electronics and solar energy due to its high conductivity. Changes in global economies, particularly in the US, China, and India, can also impact silver prices. Silver often follows gold’s movements, with the Gold/Silver ratio providing insight into their relative valuations.