Silver Strengthens, Market Focus on US Inflation Data
Silver prices (XAG/USD) strengthened slightly to around $37.90 in Asian trading on Tuesday (August 12th), driven by expectations that the US Federal Reserve will cut interest rates at its upcoming September meeting. This optimism arose after US employment data for July showed weakness, reinforcing the view that the central bank would shift to a more accommodative monetary policy. Dovish statements from Fed officials also weakened the US dollar, thus supporting the strengthening of dollar-denominated commodities like silver. Lower interest rates reduce the opportunity cost of holding non-yielding assets like this precious metal.
The financial market now projects a 90% chance of an interest rate cut at the September meeting, with a total of 58 basis points of easing by the end of the year. This projection includes two quarter-point rate cuts and a chance of approximately one-third more cuts. US consumer inflation (CPI) data, due to be released today, is the primary focus for investors as a guide to the Fed's next policy direction.
However, positive sentiment in global markets in recent sessions has also curbed the potential for a rally in silver as a safe-haven asset. One factor driving this sentiment was US President Donald Trump's decision to announce a 90-day delay in imposing massive tariffs on China, just hours before the final agreement between the two countries expired. This decision eased trade tensions between the world's two largest economies, although the market remains cautious as it awaits further developments. (alg)
Source: Newsmaker.id
