Silver prices have rebounded from a three-week low of $29.38 recorded on Tuesday, now trading around $29.60 per troy ounce during the European session on Wednesday. This upward correction is attributed to increasing speculation that the Federal Reserve (Fed) will begin reducing interest rates starting from the September meeting, following a series of weak US economic data.
On Tuesday, the JOLTS US Job Openings report indicated a decline of 296,000 to 8.059 million in April, down from March’s 8.355 million, marking the lowest level since February 2021. This figure also missed the market consensus of 8.340 million.
According to the CME FedWatch Tool, the probability of a Fed rate cut by at least 25 basis points has surged to nearly 64.9%, up from 46.3% a week earlier. Investors are now keenly awaiting key US data releases later on Wednesday, including the US ADP Employment Change and ISM Services PMI reports.
In the Middle East, geopolitical tensions are also influencing market sentiment. On Tuesday, Osama Hamdan, a Hamas official, stated in a televised press conference that Hamas cannot agree to any deal unless Israel makes a “clear” commitment to a permanent ceasefire and a full withdrawal from the Gaza Strip, as reported by Reuters.
Qatar, mediating talks between Hamas and Israel, has urged Israel to provide a clear position backed by its entire government to help reach a deal. A failure to secure a peace agreement could increase the value of safe-haven assets like Silver.
The combination of potential Fed rate cuts and ongoing geopolitical tensions is driving the current rebound in silver prices, highlighting the metal’s role as a hedge against economic and political uncertainties.
