Silver rebounds above $60 as softer US data, Warsh remarks weigh on the US Dollar
Silver (XAG/USD) rebounds on Wednesday and trades around $60.35, up 3.19% at the time of writing. The white metal is supported by a weaker US Dollar (USD) following softer-than-expected US economic data and comments from Federal Reserve (Fed) Chair Kevin Warsh.
Speaking at the European Central Bank (ECB) Forum in Sintra, Warsh said the Fed would not provide forward guidance and would adopt a new approach to make better policy decisions. He also noted that inflation risks have eased, putting pressure on the Greenback and supporting precious metals.
On the macroeconomic front, the ADP Employment Change report showed that US private payrolls increased by 98K in June, below market expectations of 113K and following a gain of 122K in May. Meanwhile, the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) declined to 53.3 in June from 54 previously, also missing market expectations.
Markets are now focused on Thursday's Nonfarm Payrolls (NFP) report, which could provide fresh guidance on the Federal Reserve's next monetary policy decisions.
Despite Wednesday's rebound, interest rate expectations remain a key driver for precious metals. Investors continue to price in a restrictive monetary policy stance, with the possibility of a rate hike later this year. Higher interest rates increase the opportunity cost of holding non-yielding assets such as Silver, limiting the metal's upside potential over the medium term.
On the geopolitical front, progress toward a final US-Iran peace agreement remains slow. Although US and Iranian officials are in Doha, no direct talks are currently scheduled, maintaining some safe-haven demand for precious metals.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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