Silver Price Forecast: XAG/USD rises to near $29.50 due to lower opportunity cost
- Silver price gains ground as rising odds of a Fed rate cut reduce the opportunity cost of holding bullion assets.
- Atlanta Fed President Raphael Bostic suggested that it might be "time to move" on implementing rate cuts.
- Israel's military and the Palestinian militant group Hamas have agreed to three-day pauses in fighting.
Silver price (XAG/USD) extends its gains for the second successive day, trading around $29.50 per troy ounce during the Asian hours on Friday. Non-yielding Silver is benefiting from a lower opportunity cost as expectations grow for a US Federal Reserve interest rate cut in September.
Investors await July’s US Personal Consumption Expenditure (PCE) Price Index scheduled to be released later in the North American Session, seeking clues about the future direction of US interest rates.
Federal Reserve Atlanta President Raphael Bostic, a prominent hawk on the FOMC, indicated on Thursday that it might be "time to move" on rate cuts due to further cooling inflation and a higher-than-expected unemployment rate. However, he wants to wait for confirmation from the upcoming monthly jobs report and two inflation reports before the Fed's September meeting.
On the geopolitical front, safe-haven bullion may encounter a challenge as Israel's military and the Palestinian militant group Hamas have agreed to three-day pauses in fighting in Gaza. These pauses are intended to allow the first round of vaccinations for 640,000 children against polio, according to a senior WHO official, as reported by Reuters on Thursday.
In other news reported by Reuters, Israeli troops killed a local commander of the Iranian-backed Islamic Jihad movement and four other militants in the West Bank on Thursday. The incident occurred during one of the largest assaults in the Israeli-occupied territory in months, marking a significant escalation in the ongoing conflict.
