Silver Falls to $41.70 Ahead of the Fed
Silver prices (XAG/USD) fell nearly 2% to around $41.70 in the European session, ahead of the Fed's monetary policy announcement at 18:00 GMT (01:00 WIB). Selling pressure increased as the market repositioned itself ahead of the interest rate decision.
Market participants believe the Fed is almost certain to cut interest rates by 25 bps to 4.00%–4.25%—a probability of around 96% according to CME FedWatch—although a small minority still target a 50 bps cut. In theory, lower interest rates are positive for non-yielding assets like silver, but short-term movements tend to be volatile around major events.
Focus is also on the "dot plot" and Summary of Economic Projections (SEP) to gauge the direction of interest rates in the near to long term. Deutsche Bank analysts expect the Fed to cut rates at its three remaining meetings this year, which could shape the underlying sentiment for precious metals.
Besides the Fed, the market is also monitoring the Bank of Canada's (BoC) decision at 1:45 PM GMT (8:45 PM WIB). The BoC is expected to cut interest rates by 25 bps to 2.5%, which could potentially impact US dollar dynamics and increase intraday volatility in XAG/USD. (ayu)
Source: Newsmaker.id
