XAG/USD moves below $30.50 due to hawkish sentiment surrounding Fed – Crypto News – Crypto News
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XAG/USD moves below $30.50 due to hawkish sentiment surrounding Fed – Crypto News

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  • Silver price continues to lose ground as FOMC Minutes suggest the Fed to be hawkish on policy stance.
  • Fed policymakers are concerned as inflation has proven to be more persistent than expected at the start of 2024.
  • The safe-haven asset, Silver, may receive support as tensions escalate between China and Taiwan.

Silver price extends its losses for the second consecutive session, trading around $30.30 per troy ounce during the early European hours on Thursday. The price of the grey metal plunged as non-yielding assets lost ground as the Federal Open Market Committee (FOMC) Meeting Minutes indicated hawkish sentiment surrounding the Federal Reserve (Fed) policy stance.

Fed policymakers expressed concerns about the lack of progress on inflation, which has proven to be more persistent than expected at the start of 2024. As a result, the Fed is hesitant to proceed with interest rate cuts. Traders’ sentiment now indicates increasing uncertainty about the Fed making multiple rate cuts in 2024.

According to the CME FedWatch Tool, the probability of the Federal Reserve implementing a 25 basis-point rate cut in September has seen a slight downtick to 50.7%, compared to 51.6% a day ago. On Tuesday, Federal Reserve Bank of Boston President Susan Collins stated that progress toward interest rate adjustment will take longer and emphasized that patience is the right policy for the Fed, per Reuters.

The safe-haven asset, Silver, may experience an increase in demand as tensions escalate following Lai Ching-te’s assumption of office as Taiwan’s new president. Chinese state media reports indicate that China has deployed numerous fighter jets and conducted simulated strikes in the Taiwan Strait and around groups of Taiwan-controlled islands. Geopolitical tensions often lead to uncertainty and risk aversion, which typically drive investors toward precious metals, including Silver.

 

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