Silver prices (XAG/USD) have climbed for the second consecutive session, reaching around $31.00 per troy ounce during Wednesday’s European trading hours. The increase in the safe-haven metal’s value is driven by concerns over escalating tensions in the Middle East. Israeli military actions in northern and central Gaza, including an airstrike on a tent encampment, have intensified the conflict.
According to reports from Reuters, Hamas has reported that these Israeli operations resulted in the deaths of over 60 Palestinians across the enclave on Tuesday. These developments threaten ongoing efforts to secure a ceasefire in the Gaza conflict, with talks scheduled to resume in Doha on Wednesday.
Investors are also focused on key events in the financial markets. Federal Reserve Chairman Jerome Powell’s second semi-annual testimony is underway, accompanied by speeches from Fed officials Michelle Bowman and Austan Goolsbee. Additionally, market attention is on the upcoming release of the US Consumer Price Index (CPI) data, expected on Thursday. Forecasts indicate that the Core CPI will likely hold steady at 3.45% year-over-year for June, with the monthly Core CPI expected to remain unchanged at 0.2%.
Despite these geopolitical tensions and market events, silver faces challenges as a non-yielding asset. Powell reiterated the Fed’s cautious stance on interest rates during his congressional testimony on Tuesday, emphasizing that recent data did not warrant immediate rate cuts.
Powell stressed that any policy rate adjustments would require stronger evidence that inflation is moving consistently towards the Fed’s 2% target. His remarks underscored the Fed’s data-driven approach to monetary policy amid current economic uncertainties.
