Silver Falls in Quiet Holiday Trading, Market Awaits This Signal!
Silver prices weakened more than 1% toward the $76 per ounce area on Monday, reversing course after posting gains in the previous session. The movement occurred amid thin volumes due to the holidays in several major markets, including the United States, China, and several other countries.
On Friday, silver surged nearly 3% after softer US inflation data reinforced expectations that the Federal Reserve is likely to cut interest rates further this year. The prospect of lower interest rates generally supports precious metals because it lowers the opportunity cost of holding non-yielding assets.
Currently, the market is widely pricing in a Fed rate cut in July, with a strong probability of a similar move in June. However, after a brief rally, some market participants began adjusting their positions, triggering a correction at the start of the week.
Investors' next focus will be on the Fed's meeting minutes and the core PCE inflation report, the US central bank's favorite inflation indicator. Both releases are seen as crucial for testing the strength of the argument for monetary easing in the coming months.
In Asia, mainland Chinese markets were closed all week for the Lunar New Year holiday. Speculative activity by Chinese market participants was previously said to have contributed to the surge in precious metal prices in recent weeks, prompting local authorities to take steps to mitigate market risks.
Silver itself has experienced extreme volatility since late January. Prices peaked above $120 per ounce in late January, before falling sharply to around $64 earlier this month as sentiment changed. With liquidity thinned due to the holiday and the market awaiting catalysts from US data, silver has the potential to remain volatile in the short term. (asd)
Source: Newsmaker.id
