Economic data and policies are driving market sentiment
The US dollar has recovered from multi-month lows, buoyed by expectations of prolonged high interest rates. This poses challenges for silver, as rising interest rates reduce the appeal of non-yielding assets. However, CME Group’s FedWatch Tool indicates a 75% probability of a 0.25% rate cut later this month, providing some relief for silver.
Moreover, 10-year US Treasury yields have fallen to their lowest levels since October, making silver an attractive alternative. Mixed economic data adds to the complexity – while the Institute for Supply Management (ISM) manufacturing PMI rose to 48.4 in November, signaling potential economic recovery, uncertainty over US trade policy and tariffs continues to weigh on the economy market confidence.
Geopolitical tensions strengthen silver’s appeal as a safe haven
Global tensions, including Russian missile attacks on Ukraine and North Korea’s alignment with Russia, have heightened investor fears, driving demand for safe havens like silver.
Low government bond yields further increase silver’s appeal and offset some of the downward pressure from a strong dollar.
Silver remains a favored hedge against economic and political instability, supported by market volatility and persistent geopolitical risks. As investors look for stability, silver is likely to maintain its safe-haven status in the short term.
Short-term forecasting
Silver (XAG/USD) stabilizes at $30.80, supported by geopolitical tensions and lower government bond yields. A break above $30.87 could create bullish momentum; support remains at $30.32.