XAG/USD Rises to Near $31.00 Amid Dovish Signals from Central Banks
Silver price (XAG/USD) extends its winning streak for the third consecutive session, trading around $30.90 per troy ounce during Asian trading hours on Thursday. The precious metal holds its gains amid dovish signals from major central banks.
The Bank of Canada (BoC) has ended its quantitative tightening and joined Sweden’s Riksbank in delivering a rate cut. Meanwhile, the European Central Bank (ECB) is also expected to lower rates this week, while the Reserve Bank of India (RBI) and the People’s Bank of China (PBoC) have signaled potential rate cuts ahead.
In the United States (US), the Federal Reserve (Fed) kept its benchmark interest rate steady at 4.25%-4.50% during its January meeting on Wednesday, as widely anticipated. This follows three consecutive rate cuts since September 2024, totaling a full percentage point.
However, Silver’s upside may be capped as the Fed delivered a hawkish message by removing language suggesting confidence in inflation moving toward its 2% target. Additionally, the central bank acknowledged strong economic growth and labor market conditions.
During his press conference, Fed Chair Jerome Powell emphasized that the US central bank would need to see “real progress on inflation or some weakness in the labor market” before considering further policy adjustments.
Meanwhile, the US Dollar Index (DXY), which tracks the greenback against six major currencies, remains steady at around 108.00. A stronger US Dollar could pose challenges for Silver, making it more expensive for foreign buyers.
Source: Fxstreet
