Silver prices bounced back from a three-week low of $29.38 recorded on Tuesday, now hovering around $29.60 per troy ounce during the European session on Wednesday. This uptick in silver prices is attributed to growing speculation that the Federal Reserve (Fed) will commence interest rate reductions starting from the September meeting, following a string of disappointing US economic data.
On Tuesday, the JOLTS US Job Openings dropped by 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 fell short of the market consensus of 8.340 million.
According to the CME FedWatch Tool, the likelihood 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 eagerly awaiting key US data releases later on Wednesday, including the US ADP Employment Change and ISM Services PMI reports.
Meanwhile, geopolitical tensions in the Middle East have also influenced market sentiment. Osama Hamdan, a Hamas official, stated in a televised press conference on Tuesday that Hamas cannot agree to any deal unless Israel commits to a “clear” 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 supported by its entire government to facilitate reaching a deal. Failure to secure a peace agreement could potentially boost the value of safe-haven assets like silver.
