Silver Price Forecast: XAG/USD Drops to Nearly $31.50 Amid Hawkish Fedspeak

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  • The price of silver is losing ground after hawkish comments from Fed officials suggest raising rates for longer.
  • A higher US dollar reduces demand for silver.
  • Traders are waiting for the FOMC minutes for further guidance on the Fed’s policy stance.

The price of silver continues to decline after retreating from a high of $32.51, a level not seen since December 2012. During Wednesday European hours, the silver price is around $31.80 per troy ounce. Investors are assessing recent comments from Federal Reserve officials, with several policymakers advising continued policy caution.

Federal Reserve Bank of Boston President Susan Collins stressed Tuesday that progress toward adjusting interest rates will take more time, stressing that the Fed’s appropriate policy will be patience. Additionally, according to Reuters, Federal Reserve Governor Christopher Waller mentioned that he would need to observe several more months of positive inflation data before he could feel comfortable supporting monetary easing.

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The US dollar (USD) strengthened ahead of the release of minutes from the May 1 Federal Open Market Committee (FOMC) meeting, which are scheduled for release on Wednesday. A higher dollar weakens demand for silver assets.

The gray metal’s weakness is being capped by renewed trade tensions between the U.S. and China. On Monday, China’s Ministry of Commerce announced a ban on the American company General Atomics Aeronautical Systems from engaging in import and export activities related to China. This decision was made in the context of ongoing trade tensions between the United States and China.

Additionally, China’s measures to stabilize its real estate sector are providing some momentum for safe-haven assets such as silver. The Chinese Ministry of Commerce announced a ban on the American company General Atomics Aeronautical Systems from engaging in import and export activities related to China. This decision was made in the context of ongoing trade tensions between the United States and China.

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