Silver Price Forecast: XAG/USD moves above $48.50 due to increased safe-haven demand

• Silver price gains as traders adopt caution ahead of the US inflation data due on Friday.

• The non-yielding Silver receives support as the Fed is widely expected to cut rates by 25 basis points in October.

• Silver declined as market sentiment improved over a potential US-China trade deal.

Silver price (XAG/USD) edges higher after two days of losses, trading around $48.70 per troy ounce during the Asian hours on Thursday. Silver prices may further appreciate due to increased safe-haven demand, driven by market caution ahead of the United States (US) inflation data for September due on Friday amid a data blackout. The prolonged US government shutdown delays the key US economic data releases, including Nonfarm Payrolls (NFP), adding uncertainty for financial markets and the Federal Reserve (Fed).

The non-interest-bearing Silver may attract more buyers amid an increased likelihood of further Federal Reserve (Fed) rate cuts. A Reuters poll suggested that 115 out of 117 economists have predicted that the Fed will reduce interest rates by 25 basis points (bps) to 3.75%-4.00% in the monetary policy announcement on October 29. For the year, 83 of 117 economists expect the US Federal Reserve to cut interest rates twice, while 32 anticipate one cut.

Silver prices retreated after reaching an all-time high of $54.86, reached on October 16, as markets weighed overbought concerns. Additionally, the optimism over a potential US-China trade deal improved market sentiment, which weakened the demand for precious metals, including Silver.

US President Donald Trump said late Wednesday that he expects to strike several agreements with Chinese President Xi Jinping during their meeting in South Korea next week. The Trump-Xi discussions are expected to cover a wide range of issues, including US soybean exports, limiting nuclear weapons, and China’s purchases of Russian Oil.