Silver price (XAG/USD) has halted its three-day losing streak, trading around $26.80 during Thursday’s European session. This recovery is attributed to rising expectations of a US Federal Reserve (Fed) rate cut in September, fueled by weaker-than-expected US employment data and escalating geopolitical tensions in the Middle East.
Market Drivers:
- Fed Rate Cut Expectations: The probability of a 50-basis point interest rate cut by the Fed in September has increased significantly, providing support for non-yielding assets like silver.
- Geopolitical Tensions: Rising tensions in the Middle East, following the killing of a top Hezbollah commander and a senior Hamas leader, have increased the safe-haven demand for precious metals like silver.
- China’s Economic Woes: Concerns about China’s economic slowdown, triggered by disappointing GDP figures and an unexpected rate cut by the PBOC, continue to weigh on silver’s demand outlook.
Market Focus:
Traders are now eagerly awaiting the release of China’s Consumer Price Index (CPI) data on Friday, which could provide further insights into the Chinese economy’s health and potentially impact silver prices.
Technical Analysis:
Silver prices have rebounded from recent lows, but the overall trend remains uncertain. The 200-day Exponential Moving Average (EMA) around $26.