Silver Price Tumbles Amid Rate Hike Expectations and Oil Market Volatility
The price of silver (XAG/USD) has been experiencing minor losses in early European trading on Monday, as it hovers above a key support area around $63.00. The bearish trend is attributed to market expectations of a rate hike by the Federal Reserve later this week, coupled with dismal sentiment due to high oil prices.
The recent US Consumer Price Index (CPI) figures have strengthened hopes that the Fed will raise interest rates by 25 basis points at its upcoming meeting. This has boosted the US Dollar, making it more challenging for precious metals like silver.
Additionally, geopolitical tensions in the Middle East are contributing to rising oil prices, further pressuring silver prices downward. The Strait of Hormuz remains closed, and the Iran-backed Houthi militias have seized strategic areas to close the Strait of Bab el-Mandeb, disrupting crude oil transport.