Silver Price Forecast: XAG/USD rises to near $31.50 due to rising hopes of Fed rate cuts

  • Silver price gains ground due to rising speculation of a Fed rate cut in September.
  • Softer US labor data fueled speculation for two interest rate cuts by the Fed in 2024.
  • A Reuters poll has indicated that nearly two-thirds of economists now predict a rate cut in September.

Silver price continues to gain ground for the third successive session, trading around $31.50 during the Asian hours on Friday. The appreciation of the grey metal can be attributed to the rising speculation of an interest rate cut by the US Federal Reserve (Fed) in September. This has followed a 25-basis points rate cut implemented by the European Central Bank (ECB) on Thursday.

The non-yielding assets like Silver could gain demand as the lower US labor data fueled hopes for two interest rate cuts by the Federal Reserve this year. Traders are likely to await further employment data from the US, including Average Hourly Earnings and Nonfarm Payrolls later in the North American session.

Initial Jobless Claims in the US increased by 8,000 to 229,000 for the week ending May 31, surpassing market expectations of 220,000. This marks the highest reading since the eight-month high of 232,000 recorded in early May. Traders await the release of US employment data releases on Friday, including the Average Hourly Earnings and Nonfarm Payrolls.

A Reuters poll conducted from May 31 to June 5 has indicated that nearly two-thirds of economists now predict an interest rate cut in September. Additionally, CME FedWatch Tool suggests the probability of a Fed rate cut in September by at least 25 basis points has increased to nearly 70.0%, up from 51.0% a week earlier.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Related Articles

Back to top button