In the early European session, the price of silver (XAG/USD) has surpassed $23.20, benefiting from escalating tensions in the Middle East that have heightened the appeal for safe-haven assets. The white metal’s performance, however, is expected to be significantly influenced by the upcoming interest rate decision from the Federal Reserve (Fed), scheduled for Wednesday.
S&P500 futures have registered losses in the Asian session, signaling a decline in market participants’ risk appetite. The US Dollar Index (DXY) has rebounded above 103.50 amid uncertainty ahead of the Fed’s policy announcement. Additionally, 10-year US Treasury yields have dipped to near 4.05%, reflecting a shift in market sentiment.
According to the CME Fedwatch tool, traders are confident that the Fed will maintain interest rates in the range of 5.25-5.50%. There has been a shift in investors’ expectations for the first rate-cut decision, now anticipated in May as opposed to earlier expectations for March. The US economy’s robust performance, particularly in the labor market and consumer spending, is likely contributing to the expectation that price pressures will remain unabated.
Before the Fed’s policy announcement, investors will be closely watching the US JOLTS Job Openings data for December, set to be published at 15:00 GMT. Estimates suggest that US employers advertised a fresh requirement of 8.75 million jobs, slightly lower than the 8.79 million reported in November. This economic data release will play a role in shaping market sentiment and influencing silver prices in the short term.
