Silver Rebounds Near Record, Fed Key?
Silver (XAG/USD) rose around 0.5% to $57.50 during the Asian session on Friday (December 5). This strengthening occurred after silver briefly corrected to near $56.50 from its all-time high of $58.90, appearing to be in a "short pause" phase before attempting to continue rising. The return of buying interest indicates that bullish sentiment in the silver market remains quite strong.
The main driver of this rally is market confidence that the Federal Reserve will cut interest rates next week. According to CME FedWatch, the probability of the Fed cutting interest rates by 25 bps to 3.50%–3.75% at its December meeting is now around 87%. Lower interest rates typically benefit non-yielding assets like silver, as the opportunity cost of holding the precious metal decreases.
Interestingly, this dovish speculation contrasts with Fed Chairman Jerome Powell's cautious tone at the October conference, when he said a December rate cut was "far from certain." However, the latest US labor market data put pressure on the Fed: the ADP report showed the private sector lost 32,000 jobs in November, against expectations of a 5,000 increase. Several FOMC officials have also begun to openly support further policy easing due to concerns about the risks of a weakening labor market, further fueling the silver rally. (az)
Source: Newsmaker.id
