Silver Price Forecast: XAG/USD rises toward $39.00 due to increased safe-haven demand
Silver price appreciates as safe-haven demand increases amid rising concerns over Fed independence.
President Trump announced the removal of Fed Governor Lisa Cook over allegations of mortgage fraud.
Fed Cook’s removal could heighten the likelihood of earlier interest rate cuts amid Trump’s pressure to lower borrowing costs.
Silver price (XAG/USD) recovers its recent losses from the previous session, trading around $38.80 per troy ounce during the Asian hours on Tuesday. The price of Silver gains ground amid increased safe-haven demand, driven by the rising concerns over Federal Reserve (Fed) independence after the US President Donald Trump announced to remove Fed Governor Lisa Cook over alleged mortgage fraud.
President Trump posted a letter on social media early Tuesday, saying that he was removing Fed Governor Cook from her position on the Fed's board of directors. Cook’s dismissal may increase the chances of earlier interest rate cuts, given Trump’s ongoing pressure on the central bank to reduce borrowing costs. However, Cook said that she will not resign as there is no cause exists for her to be fired. I will continue to carry out duties, she added.
Additionally, Trump warned he could impose a 200% tariff on Chinese goods if Beijing refuses to supply magnets to the United States (US), Reuters reported. Moreover, a Bloomberg report says that Trump threatened "subsequent additional tariffs" and export restrictions on advanced technology and semiconductors in retaliation for digital services taxes that hit American technology companies.
Fed Chair Jerome Powell said at the Jackson Hole symposium on Friday that risks to the job market were rising, but also noted inflation remained a threat and that a decision wasn't set in stone. Traders will likely await the upcoming release of the Q2 US Gross Domestic Product Annualized and July Personal Consumption Expenditures Price Index data, the Fed's preferred inflation gauge.
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