Silver Price Stumbles Amid Hawkish Fed Bets
The silver price, denoted by XAG/USD, has seen a strong opening but struggled to extend its gains beyond $58.68 due to hawkish Federal Reserve bets.
The US-Iran ceasefire announcement led to lower oil prices and anchored global inflation expectations, causing the silver price to open at $58.20, up 1% from the previous day.
Historically, silver has been a safe-haven asset, but its recent underperformance is attributed to higher oil prices that fueled global inflation projections, forcing central banks to tighten monetary conditions.
The hawkish Federal Reserve is expected to hike interest rates in September, which would restrict the silver price's upside. Analysts at Deutsche Bank predict two further 25bps increases this year, and the CME FedWatch tool indicates a 64.5% probability of rate hikes next month.