Silver price (XAG/USD) saw some sellers close to $31.25 during the early Asian session on Monday. Improved risk sentiment in global markets fueled some profit booking in the white metal. Traders will be eyeing US Federal Reserve (Fed) Chair Jerome Powell’s speech later on Monday.
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US interest rate outlook
The upbeat mood could put some selling pressure on the white metal as traders await new catalysts. Fed Chair Jerome Powell’s speech could give some indication of the US interest rate outlook for this year.
People’s Bank of China (PBoC) Governor Pan Gongsheng announced new stimulus measures to revive the weak property sector and low domestic demand in the country. Also, the PBoC said the central bank will reduce the amount of reserves held by banks. “With continued rate cuts and China’s stimulus expected to continue for some time, silver will continue to rally in the coming quarters,” said Amelia Xiao Fu, Head of Commodity Markets at BOCI.
Big Rate Cut
Additionally, expectations of another big rate cut in the US provide some support to the silver price. According to the CME FedWatch tool, interest rate futures contracts have put a roughly 54% chance of a half-point cut in November, while a quarter-point cut is expected to be at 46%.
Meanwhile, Israel’s assassination of Hezbollah leader Hassan Nasrallah has further escalated geopolitical tensions in the Middle East and intensified the war on its border with Lebanon. According to CNN, the Iran-backed militant group says it will continue fighting even as a growing number of Hezbollah senior leaders have been assassinated. Growing geopolitical tensions in the Middle East could boost silver.
