XAG/USD refreshes 14-year high near $43.80 on Fed dovish expectations
Silver price (XAG/USD) posts a fresh 14-year high around $43.80 on Monday. The white metal surges almost 1.6% at the start of the week as United States (US) bond yields struggle to extend its upside move amid firm expectations that the Federal Reserve (Fed) will continue reducing interest rates amid slowing job market.
10-year US Treasury Yields struggles to extend its three-day recovery move above 4.15%. Lower yields on interest-bearing assets increase the appeal of non-yielding assets, such as Silver.
On Wednesday, the Fed reduced its key borrowing rates by 25 basis points (bps) to 4.00%-4.25% and signaled more interest rate cuts in the remainder of the year. The Fed’s dot plot showed that policymakers collectively see the Federal Fund rate heading to 3.6% by the year-end.
For more cues on the interest rate outlook, investors await Fed Chair Jerome Powell’s speech at the Greater Providence Chamber of Commerce 2025 Economic Outlook Luncheon on Tuesday. Market participants would like to know how bad the labor demand situation is, as the Fed has signaled further policy easing even as inflation has remained well above the 2% target.
In Monday’s session, a slew of Federal Open Market Committee (FOMC) members, including newly appointed President Donald Trump’s candidate Stephen Miran, are scheduled to speak. Miran was the one FOMC member who voted for a 50-bps interest rate cut in the policy meeting last week.
Source : Fxstreet.com
