Silver Surges to $30.25 Amid Speculation of Fed Rate CutsDuring Thursday’s London session, silver has surged to $30.25, bolstered by robust buying interest. This momentum is largely driven by the normalization of US labor market conditions, which have heightened expectations that the Federal Reserve (Fed) may begin cutting interest rates in its September meeting.
According to the CME FedWatch tool, there is now a 68% probability of a rate cut in September, a significant increase from the 47% chance recorded just a week earlier. This shift in expectations has put substantial pressure on US bond yields. Although 10-year US Treasury yields have inched up to around 4.29%, they remain significantly lower than the weekly high of 4.64%. Lower yields on interest-bearing assets diminish the opportunity cost of holding non-yielding assets such as silver, making them more attractive.
Technical Analysis
From a technical perspective, silver's price action indicates a divergence on the H4 chart following a rebound from a key support level. This suggests the potential for a new bullish impulse.
Combining these fundamental and technical insights, the outlook for silver remains positive, with further gains likely in the near term.
