Silver (XAG) Daily Forecast: Metal to Bounce-off Above $26.27?

Furthermore, reduced geopolitical tensions in the Middle East contributed to downward pressure on safe-haven assets. The optimistic sentiment in equity markets further diminished demand for silver as investors favored riskier assets over precious metals.

Federal Reserve’s Hawkish Stance and Powell’s Forecast

On the US front, the Federal Reserve’s hawkish stance on Wednesday, indicating reluctance to cut rates until confident about declining inflation, lifted US Treasury bond yields and strengthened the US dollar.

Despite persistent inflation, Fed Chair Jerome Powell ruled out further rate hikes, predicting prolonged high rates due to slower disinflation, which dampened silver prices. This led to a decline in silver prices by 1.5%, hitting an intraday low of $26.47 per ounce.

Hence, the Fed’s hawkish stance, combined with Powell’s forecast of prolonged high rates due to slower disinflation, subdued silver prices, as investors preferred the stronger US Dollar and avoided safe-haven assets.

Moving on, investors may wait on the sidelines before releasing the highly anticipated US Nonfarm Payrolls (NFP) report on Friday. Thursday’s economic calendar includes key data such as Challenger Job Cuts, Weekly Initial Jobless Claims, and Trade Balance figures, which are forecasted to impact market sentiment.

Easing Geopolitical Tensions

The easing of geopolitical tensions has exerted downward pressure on safe-haven assets like XAG/USD. While this shift has dampened demand for silver, the lingering uncertainty suggests that a resurgence in conflict could reignite interest in safe-haven assets.

Consequently, investors may continue to monitor geopolitical developments closely, as any escalation in tensions may prompt a flight to safety, driving up demand for silver and government bonds as preferred havens amidst uncertain geopolitical landscapes.