Silver prices inched up on Wednesday, driven by safe-haven demand and increasing expectations of a Federal Reserve rate cut as early as September. However, gains were limited by a rebounding U.S. dollar and rising Treasury yields.
At 11:22 GMT, XAG/USD is trading $27.13, up $0.17 or +0.61%.
Industrial Demand Concerns
Despite the modest uptick, skeptics note that silver's gains may be capped by anticipated economic slowdowns in China and the United States, potentially dampening industrial demand. This factor remains a key consideration for traders assessing the metal's long-term prospects.
Fed Rate Cut Expectations
Traders have adjusted their rate cut expectations following last week's soft jobs report. The CME FedWatch Tool now indicates a 100% chance of a rate cut in September, with nearly 105 basis points of cuts anticipated by year-end. This outlook for looser monetary policy provides support for silver as a non-yield-bearing asset.
Treasury Yields and Dollar Movements
Treasury yields climbed early Wednesday as global markets continued to reverse course from a dramatic equity sell-off earlier in the week. The benchmark 10-year Treasury yield rose over 4 basis points to 3.9354%. Simultaneously, the dollar index inched away from a seven-month low touched on Monday, potentially capping silver's gains.
Source : FXempire
