Silver prices (XAG/USD) continued to decline for the third consecutive session, trading around $33.50 during Friday’s Asian trading hours. The drop in the precious metal’s value is largely attributed to the strong performance of the US Dollar (USD) and rising Treasury yields.
Recent data released on Thursday revealed a significant drop in US unemployment claims for late October, highlighting the resilience of the labor market. Additionally, an uptick in the S&P Purchasing Managers’ Index (PMI) further underscores robust momentum in the private sector.
This strong US economic performance bolsters the likelihood that the Federal Reserve (Fed) will adopt a less aggressive stance on interest rate cuts than previously anticipated. According to the CME FedWatch Tool, there is a 97% probability of a 25-basis-point rate cut by the Fed in November, with no expectation of a larger 50-basis-point cut.
Despite the prevailing challenges, silver could see upward support due to uncertainties surrounding the upcoming US presidential election. A recent Reuters/Ipsos poll indicated that Vice President Kamala Harris holds a narrow lead over former President Donald Trump, with 46% to 43% in a six-day poll that concluded on Monday.
Additionally, safe-haven demand for silver may increase amid ongoing uncertainties in the Middle East. Traders are closely monitoring Israel’s response to Iran’s missile attack on October 1, as US and Israeli officials prepare to resume discussions on a potential ceasefire and the release of hostages in Gaza in the coming days.
US Secretary of State Antony Blinken stated on Thursday that the United States does not support a prolonged Israeli military campaign in Lebanon, while France has called for an immediate ceasefire and diplomatic efforts to de-escalate the situation.
Related Topics:
