During the early European session on Wednesday, the price of silver exhibited a sideways trend, maintaining positive sentiment as it hovered around $28.10 per troy ounce. This marks the fourth successive session of potential gains for the precious metal.
Expectations of potential rate cuts from the Federal Reserve (Fed) this year have bolstered the outlook for silver prices. The decline in US Treasury yields has provided support for non-yielding assets like silver, with 2-year and 10-year yields on US Treasury bonds currently standing at 4.74% and 4.36%, respectively.
Additionally, silver prices often track the movement of gold prices, which have been supported by increased consumer and industrial demand. Recent reports of China adding 160,000 troy ounces of gold to its reserves in March, along with gold purchases by other countries such as Turkey, India, Kazakhstan, and several Eastern European nations, have contributed to the positive sentiment surrounding precious metals.
Furthermore, escalating geopolitical tensions in the Middle East have driven investors towards safe-haven assets like silver. Israel’s Foreign Affairs Minister, Israel Katz, issued a warning regarding potential retaliation against Iran, while peace talks between Israel and Hamas in Egypt have yielded little progress.
Investors remain cautious as they await incoming data that could influence potential policy shifts. Strong labor market figures from last week may prompt a more hawkish stance from the Federal Reserve if inflation surpasses expectations, potentially limiting the upward momentum of silver prices.
