Silver (XAG/USD) has maintained its upward momentum for the fifth consecutive day, trading around $29.70 per troy ounce during Wednesday’s Asian session. The metal’s price surge is attributed to investor sentiment influenced by Federal Reserve (Fed) Chair Jerome Powell’s cautious stance on monetary policy.
Powell’s recent remarks indicated the Fed’s commitment to addressing disinflationary pressures while maintaining vigilance over economic indicators such as the robustness of the US economy and labor market, according to Reuters. This tempered approach to interest rate adjustments has resonated positively among investors, bolstering demand for silver as a hedge.
Furthermore, comments from Chicago Federal Reserve Bank President Austan Goolsbee underscored concerns about signs of economic weakening, despite progress towards the Fed’s inflation targets potentially accelerating. These factors have contributed to heightened expectations of a future reduction in interest rates, enhancing the appeal of non-yielding assets like silver.
In addition to monetary policy dynamics, geopolitical tensions in the Middle East have added support to silver prices. Escalating conflict between Israel and Gaza, marked by Israeli airstrikes and Palestinian evacuations from Khan Younis, has intensified global uncertainties. Such geopolitical turmoil often amplifies demand for safe-haven assets, including silver.
The confluence of dovish Fed signals and geopolitical unrest underscores silver’s current rally, positioning it as a favored asset amidst economic uncertainties and market volatility.
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