Silver Price Forecast: XAG/USD treads water near $28.10 amid escalated geopolitical tension
- Silver price gains ground on expectations of Fed rate cuts in 2024.
- The non-yield asset like Silver appreciates as US Treasury yields decline.
- Israel's Foreign Affairs Minister, Israel Katz, affirmed that Israel would retaliate if Iran attacks its territory.
Silver price exhibits a sideways trend with positive sentiment to extend its gains for the fourth successive session, hovering around $28.10 per troy ounce during the early European session on Wednesday.
Silver price could appreciate further on expectations of rate cuts from the Federal Reserve (Fed) this year. The decline in US Treasury yields leads to supporting non-yielding assets like Silver, with 2-year and 10-year yields on US Treasury bonds standing at 4.74% and 4.36%, respectively, at the current press time.
Furthermore, the price of Silver follows the upward movement in Gold prices, supported by increased consumer and industrial demand. China's addition of 160,000 troy ounces of gold to its reserves in March, along with gold purchases by Turkey, India, Kazakhstan, and several Eastern European countries this year, further contributes to the positive sentiment surrounding precious metals.
The escalating geopolitical tensions in the Middle East are driving investors towards safe-haven assets like Silver. Israel's Foreign Affairs Minister, Israel Katz, issued a warning that Israel would retaliate if Iran attacks its territory. Additionally, peace talks between Israel and Hamas in Egypt have failed to make progress.
Investors adopt a cautious stance, anticipating potential policy shifts influenced by incoming data. Strong labor market figures from last week could prompt a more hawkish stance from the Federal Reserve if inflation exceeds expectations. This could potentially limit the upward momentum of Silver price.