Silver Prices Consolidate Amid Fed Uncertainty

Silver prices are consolidating after a recent rally as bullish momentum fades. The XAG/USD pair is trading around $63.96, down 2.77% on the day.

The Federal Reserve's (Fed) monetary policy path remains uncertain, keeping sentiment cautious. Recent weak US economic data have reduced expectations of an imminent Fed rate hike, which helped Silver rebound from near $55 at the start of the month.

However, the energy shock caused by tensions in the Middle East keeps inflation risks alive and leaves the possibility of a rate increase later this year on the table. The prospect of higher interest rates weighs on Silver by increasing its opportunity cost compared to other assets.