Silver Stable, But Combination of Rate Cuts & Global Conflict Could Change the Game
Silver prices tended to be stable with a slight downward bias in Tuesday's trading, with spot XAG/USD holding near $51 per troy ounce. Market participants held back after the previous sharp rally, while digesting a combination of mixed US economic data and strong speculation that the Federal Reserve would cut interest rates again at its December meeting. Expectations of monetary easing were actually the main support for the precious metal, but occasional strengthening of the US dollar limited silver's upside.
Fundamentally, a series of data, such as less aggressive US retail sales and producer inflation, reinforced the view that growth was starting to slow, giving the Fed additional reasons to cut interest rates. US bond yields, which tended to be stable to slightly lower, helped contain selling pressure on the precious metal. However, silver, as a non-yielding asset, still had to compete with other risk assets that also benefited from expectations of lower interest rates, preventing buying interest from flowing entirely to the safe haven.
On the other hand, silver continued to receive support from its combined role as a hedge and an industrial commodity. Remaining high geopolitical uncertainty—both stemming from the Ukraine-Russia war and tensions in the Middle East—is prompting some investors to maintain exposure to precious metals. Meanwhile, the prospect of industrial demand from the green energy and electronics sectors keeps the medium-term outlook constructive. As long as prices remain above the psychologically important $50 level, underlying sentiment for silver remains positive, although short-term movement appears limited.
Source: Newsmaker.id
