Silver declines as firm US Dollar, risk tone weigh on safe-haven appeal
Silver (XAG/USD) trades lower on Tuesday, around $51.20 at the time of writing. Despite this decline, any meaningful correction remains limited, as investors continue to show interest in the white metal amid elevated geopolitical uncertainty and a growing likelihood of further US monetary easing. In the short term, however, the improvement in global risk appetite is reducing safe-haven demand and limiting upside attempts.
At the same time, the US Dollar (USD) is holding onto part of its recent gains, curbing the attractiveness of Silver for international buyers. The Greenback remains firm near key technical levels, although traders remain cautious ahead of a series of major US macroeconomic releases.
This caution follows mixed signals from Federal Reserve (Fed) officials in recent days. Comments from John Williams, President of the Federal Reserve Bank of New York, suggesting that rates could be lowered without jeopardizing the inflation target, and from Christopher Waller, who argued that labor market softness may justify another rate cut in December, have strengthened expectations of further easing.
According to the CME FedWatch tool, the chance of a 25-basis-point rate cut in December is now close to 80%, a development that broadly supports non-yielding precious metals as real yields decline.
Geopolitical tensions also remain a key driver of safe-haven demand. The escalation of the Russia–Ukraine conflict, with new strikes on Kyiv, and persistent frictions in the Middle East despite a fragile ceasefire continue to push investors toward defensive assets. Any renewed deterioration in global risk sentiment could therefore quickly revive demand for Silver.
Attention now turns to US economic data releases later in the day, including the Producer Price Index, Retail Sales, Pending Home Sales, and the Richmond Manufacturing Index. These figures may inject volatility into the US Dollar and offer short-term opportunities on XAG/USD, as the market assesses whether the broader bullish trend remains intact despite the ongoing consolidation phase.
Source: FXstreet
