Silver Price Forecast: XAG/USD depreciates to near $33.50 due to solid US Dollar
- Silver price loses ground due to the robust performance of the US Dollar (USD) and higher Treasury yields.
- The US Dollar gains ground as recent data bolster the chances of the Fed adopting a less-dovish rates policy.
- The Silver may appreciate due to market caution amid uncertainties regarding the upcoming US presidential election.
Silver price (XAG/USD) extends its losses for the third successive session, trading around $33.50 during Friday’s Asian hours. The downside of the precious metal Silver price could be attributed to the robust performance of the US Dollar (USD) and higher Treasury yields.
On Thursday, data indicated that US unemployment claims dropped significantly in late October, underscoring the strength of the labor market. Additionally, a rise in the S&P PMI further highlights robust momentum in the private sector.
The strong US economic data bolster the likelihood that the Federal Reserve (Fed) will take a less aggressive approach to interest rate cuts than previously thought. 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 challenges, safe-haven Silver may find upward support due to uncertainties surrounding the upcoming US presidential election. A recent Reuters/Ipsos poll showed that Vice President Kamala Harris holds a slight lead of 46% to 43% over former President Donald Trump in a six-day poll that closed on Monday.
Silver price may gain support from safe-haven flows amid uncertainties regarding the Middle East situation. Traders watch for Israel's response to Iran's missile attack on October 1. In parallel, US and Israeli officials are preparing to resume talks on a potential ceasefire and the release of hostages in Gaza in the coming days.
US Secretary of State Antony Blinken stated Thursday that the United States does not support a prolonged Israeli campaign in Lebanon, while France has advocated for an immediate ceasefire and diplomatic efforts.
