Silver prices (XAG/USD) paused their five-day winning streak, trading around $30.40 per troy ounce during Thursday’s European session. The dip in the safe-haven metal’s value is linked to rising optimism over renewed efforts to broker a ceasefire between Israel and Hamas, as reported by Reuters.
Mediators Egypt and Qatar have conveyed a response from Hamas regarding a proposal that involves releasing hostages held in Gaza and establishing a ceasefire in the Palestinian enclave. Israeli authorities are currently reviewing the document, according to a statement from Prime Minister Benjamin Netanyahu’s office via the Mossad intelligence agency.
Despite the pullback, the downside for XAG/USD may be limited due to potential weakness in the US Dollar (USD). Recent soft US economic data have fueled speculation that the Federal Reserve might cut interest rates in 2024. The US ISM Services PMI plummeted to 48.8 in June, the sharpest drop since April 2020 and well below the market forecast of 52.5, following May’s reading of 53.8.
Furthermore, the ADP Employment report indicated that US private businesses added 150,000 jobs in June, the smallest increase in five months. This figure was below the anticipated 160,000 and the revised May figure of 157,000.
Federal Reserve Chairman Jerome Powell recently acknowledged that the Fed is on a disinflationary path but emphasized the need for more evidence before considering rate cuts, given the resilience of the US economy and labor market, according to Reuters.
