Silver Price Forecast: XAG/USD reaches 14-year highs above $40.50 amid safe-haven demand
Silver price marked $40.85, the highest since September 2011, on Tuesday.
US July Personal Consumption Expenditures Price Index pointed to sustained inflationary pressures, adding to uncertainty around potential Fed rate cuts.
Silver receives support from safe-haven demand, driven by lingering uncertainty over the legality of Trump’s dismissal of Fed Governor Cook.
Silver price (XAG/USD) trades near $40.85 per troy ounce, the highest since September 2011, which was marked during the Asian hours on Tuesday. The precious metals like Silver attract buyers amid increased safe-haven demand, driven by US Federal Reserve (Fed) independence concerns, uncertainty surrounding Fed policy outlook, and US President Donald Trump's tariffs.
United States (US) July’s Personal Consumption Expenditures (PCE) Price Index signaled persistent inflationary pressures and heightened uncertainty over potential Fed rate cuts. However, traders are now pricing in more than 89% of a 25 basis points (bps) rate cut by the Fed at the September policy meeting, up from an 84% chance a week ago, according to the CME FedWatch tool.
Market participants are also awaiting upcoming employment figures due this week that could shape the US Federal Reserve’s (Fed) policy decision in September. Key reports include ADP Employment Change, Average Hourly Earnings, and Nonfarm Payrolls for August.
Safe-haven demand for Silver is further supported by ongoing concerns about the US central bank’s independence. Uncertainty persists over the legality of Trump’s dismissal of Fed Governor Lisa Cook, after a court hearing on Friday concluded without a decision on whether to temporarily halt the move.
Meanwhile, the US Court of Appeals for the Federal Circuit upheld a ruling that the sweeping tariffs the US President Donald Trump unilaterally imposed on most other countries were illegal. Trump blasted the decision as “highly partisan” and vowed to appeal to the US Supreme Court.
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