Silver Price Outlook: XAG/USD steadies near $81.00 as expectations for Fed rate reductions diminish
Silver Prices Hold Steady Amid Shifting Global Economic Factors
Silver (XAG/USD) is trading quietly near $80.80 per troy ounce in early European trading on Tuesday, following a modest uptick in the previous session. Precious metals like silver, which do not yield interest, are facing downward pressure as hopes for imminent Federal Reserve (Fed) rate reductions diminish. This shift is largely due to mounting inflation worries, fueled by escalating energy costs. The ongoing conflict in the Middle East has driven oil prices higher, intensifying inflation concerns and reducing the likelihood of near-term monetary policy easing.
According to the CME FedWatch Tool, most analysts anticipate that the US central bank will maintain its key interest rate within the 3.50%–3.75% range at Wednesday’s policy meeting. Should the Fed leave rates unchanged, it would represent the second straight meeting without a rate adjustment, following the end of its previous easing cycle.
On Tuesday, the Reserve Bank of Australia (RBA) increased its Official Cash Rate (OCR) from 3.85% to 4.10% during its March meeting, potentially making it the first G10 central bank to resume tightening measures. In contrast, the Bank of Japan (BoJ) is widely projected to keep its interest rates steady at 0.75% when it meets on Thursday.
Silver prices found some support as the US Dollar (USD) and Treasury yields softened, a move attributed to a drop in oil prices. The decline in crude was prompted by the safe passage of several tankers through the Strait of Hormuz and expectations that major economies will tap into petroleum reserves to cushion against possible supply interruptions.
US Treasury Secretary Scott Bessent announced that the United States is permitting Iran to continue exporting oil via the Strait of Hormuz. Meanwhile, President Donald Trump is seeking international cooperation to help ensure the security of commercial shipping in this crucial maritime corridor.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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