Impact of the Fed’s 50 basis point rate cut
The surprising 50 basis point interest rate cut by the Federal Reserve has further fueled silver’s rally. While markets expected a 25 basis point cut, the Fed took a more aggressive stance, showing confidence in meeting its 2% inflation target.
This move has weakened the US dollar, making silver more attractive to investors looking for safe-haven assets. Historically, silver prices have typically followed gold prices, which have also seen gains due to the Fed’s monetary easing.
Outlook for Silver Amid Fed Policy and Global Demand
With the Fed hinting at two to three more rate cuts in 2024, the weakened dollar could continue to boost silver prices in the near term. The depreciation of the US dollar tends to make commodities like silver more attractive to investors.
As global demand – especially from China – remains robust, silver prices could see further upward movement. However, investors should remain cautious as any shift in Fed policy or economic prospects could impact the metal’s trajectory.
Short-term forecasting
Silver (XAG/USD) is showing strong bullish momentum, trading at $30.68 after breaking its recent losing streak. Rising demand from China’s solar panel and technology industries, along with the Fed’s surprise 50 basis point rate cut, continues to support prices.