During Asian trading on Thursday, silver prices continued their downward trend, hovering around $31.40 per troy ounce. Investor caution prevails as they await the release of key US economic indicators, including the Gross Domestic Product Annualized (Q1) data on Thursday and the Core Personal Consumption Expenditures (PCE) Price Index figures on Friday.
Expectations for US economic growth in the first quarter on an annualized basis are subdued, with forecasts suggesting a 1.3% increase, lower than the previous quarter’s 1.6% rise. Meanwhile, the US Core PCE, the Federal Reserve’s preferred inflation gauge, is anticipated to show a month-over-month increase of 0.3% and a year-over-year rise of 2.8% in April.
Concerns about potential rate hikes have intensified following hawkish remarks from US Federal Reserve (Fed) officials. Remarks from Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, suggesting the possibility of a rate hike, have fueled risk aversion sentiment. Kashkari expressed doubts about the disinflationary trend, stating, “I don’t believe anyone has completely ruled out the option of increasing rates.” Additionally, comments from Atlanta Fed President Raphael Bostic underscored uncertainties about achieving the 2% inflation target.
Amid ongoing geopolitical tensions in the Middle East, traditional safe-haven assets like silver could experience increased demand. The Israeli military’s announcement of “operational control” over the Philadelphi Corridor, a strip of land along the border between Gaza and Egypt, highlights geopolitical developments that could support safe-haven assets.
