Silver (XAG) Daily Forecast: Fed Caution and Geopolitics to Keep Prices Above $31

Cleveland Fed President Loretta Mester noted that a robust job market alleviates concerns about maintaining restrictive rates, and Boston Fed President Susan Collins pointed out that any progress towards lower rates will be gradual.

Financial markets expect the first rate cut no sooner than September, with projections of two quarter-point reductions by the end of the year. This stance has strengthened the US dollar, thereby pressuring silver prices.

Geopolitical Factors Supporting Silver Price

On the flip side, escalating tensions between the US and China have had a mixed impact on the market. The US recently announced tariff hikes on various Chinese goods, prompting potential retaliatory measures from China, such as higher temporary tariffs on imported cars with large engines.

Additionally, ongoing geopolitical tensions in the Middle East further contribute to market uncertainty. These developments could enhance silver’s appeal as a safe-haven asset, potentially limiting further declines in its price.

Market Reactions and Forecast

Despite the recent downward trend, the renewed US-China trade tensions and persistent geopolitical issues in the Middle East are likely to support silver prices.

The current cautious stance of the Federal Reserve on inflation, coupled with the expectation of prolonged high interest rates, has bolstered the US dollar. However, these geopolitical concerns may provide a floor for silver prices, mitigating deeper losses.

Short-Term Forecast

Silver (XAG/USD) is expected to remain under pressure due to a strong US dollar and cautious Fed stance, but geopolitical tensions may provide support, limiting further declines below $31.10.