The price of silver (XAG/USD) has surged above $29.00 per troy ounce as market participants eagerly await Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium. Boston Fed President Susan Collins has already expressed support for interest rate cuts next month, adding to the anticipation.
With the ongoing deadlock between Israel and Hamas adding to geopolitical tensions, silver, a traditional safe-haven asset, is expected to continue its upward trajectory. However, recent industrial output data from China suggests challenges ahead for silver demand due to a struggling economy in the manufacturing sector.
Analysis:
Investors are closely watching Powell’s speech for any hints of potential rate cuts by the Fed. The optimistic outlook from Federal Reserve officials, including Susan Collins, has already fueled expectations of a rate reduction next month. The CME FedWatch Tool indicates a high probability of a 25 basis point rate cut in September, further boosting silver prices.
On the geopolitical front, tensions between Israel and Hamas could drive demand for safe-haven assets like silver. However, concerns over China’s economic slowdown may pose challenges for industrial demand, impacting silver prices in the near term.