Silver Soars, Fed Worried?
Silver prices (XAG/USD) continued their three-day rally, approaching US$52.00 per troy ounce during Wednesday's Asian session. This strengthening occurred as US bond yields weakened, with the 10-year US Treasury yield holding around 4.00% after falling around 3.4% over the week. Lower yields make non-yielding assets like silver attractive again to investors.
According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 bps to a range of 3.50%-3.75% at its December meeting jumped to around 85.3%, from just 50.1% the previous week. These dovish expectations were reinforced by comments from New York Fed President John Williams, who assessed that monetary policy remains quite tight but still has room for further easing in the near future.
From a monetary policy perspective, Bloomberg reported that White House economic adviser Kevin Hassett has emerged as the leading candidate to replace Fed Chair Jerome Powell. If Hassett and other President Donald Trump candidates, such as Stephen Miran, join the FOMC, the market sees the possibility of a faster easing cycle, in line with Trump's criticism of high interest rates. This combination of rate cut expectations and yield pressure will provide additional fuel for the silver rally. (az)
Source: Newsmaker.id
