Silver trades higher on safe-haven demand, Fed policy focus
Silver (XAG/USD) trades around $114 on Wednesday at the time of writing, up about 1.80% on the day. The white metal extends its bullish momentum and maintains a positive bias, underpinned by persistent demand for safe-haven assets in an environment marked by risk aversion and a weaker US Dollar (USD).
Interest in precious metals is intensifying as investors react to comments from US President Donald Trump, who said he was unconcerned about the recent decline in the US Dollar. These remarks reinforce the idea that the US administration is comfortable with, or even supportive of, a weaker currency to boost export competitiveness. This perception adds further pressure on the Greenback and mechanically supports Dollar-denominated assets such as Silver.
Silver is benefiting from the broader climate of political uncertainty in Washington. Tensions surrounding budget negotiations, trade threats, and growing questions over the independence of the Federal Reserve (Fed) are fueling a narrative of distrust toward US assets. In this context, investors are seeking protection by increasing exposure to precious metals, which are widely viewed as stores of value during periods of instability.
The Fed’s policy meeting is another key driver for the market. The US central bank is expected to keep interest rates unchanged in a 3.50%-3.75% range at the conclusion of its meeting, which is scheduled for later in the day. After several rate cuts earlier this year, markets will closely scrutinize Chair Jerome Powell’s press conference for clues on the future direction of monetary policy. Any hint of a prolonged accommodative bias could further weigh on the US Dollar and reinforce the appeal of Silver, a non-yielding asset that is highly sensitive to real rate expectations.
Source: FXStreet.com
