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Home Silver Price Silver Price Recovers to Near $22.70 as US Dollar Faces Pressure

Silver Price Recovers to Near $22.70 as US Dollar Faces Pressure

by anna

Silver price (XAG/USD) sharply recovers to near $22.70 as the US Dollar faces a sell-off in the London session on Tuesday. The recovery in the white metal is attributed to easing geopolitical tensions as US President Joe Biden expresses confidence in a ceasefire between Israel and Palestine by next week. Progress in negotiations for releasing Israeli hostages further contributes to the positive sentiment.

The US Dollar Index, representing the Greenback’s value against six rival currencies, extends its correction to 103.70, putting upward pressure on silver and other precious metals.

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Investors are closely monitoring the upcoming United States core Personal Consumption Expenditure price index (PCE) data for January. This data will provide insights into the timing of potential rate cuts by the Federal Reserve (Fed). Investors anticipate a sharp rise in monthly core PCE, from 0.2% in December to 0.4% in January. However, the annual core PCE data is expected to decelerate to 2.8% from the previous reading of 2.9%. The outcome of this data will impact expectations for Fed rate cuts, with hotter-than-expected inflation potentially postponing rate cut expectations.

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Kansas City Federal Reserve Bank President Jeffrey Schmid noted on Monday that inflation remaining above 2%, tight labor market conditions, and a positive demand outlook suggest that there is no immediate need for rate cuts. This sentiment aligns with the broader stance of some Fed officials.

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