Silver Hits 14-Year High
Silver prices (XAG/USD) surged to a 14-year high around $40.70 in European trading on Monday (September 1). This increase was fueled by market optimism that the Federal Reserve (The Fed) will cut interest rates at its September policy meeting.
According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 bps this month is at 87.6%. In theory, lower interest rates tend to support non-yielding assets like silver and gold.
Additional support came from comments by San Francisco Fed President Mary Daly, who emphasized that interest rate cuts were necessary due to increasing risks in the labor market. Daly also stated that inflationary pressures from tariffs were temporary and unsustainable.
Furthermore, the US dollar weakened to near a monthly low due to concerns about the credibility of US economic policy. The weakening dollar also boosted silver prices. Pressure on the dollar intensified after a US appeals court declared most Trump-era tariffs illegal and accused former President Trump of exceeding his authority. (ayu)
Source: Newsmaker.id