Silver (XAG) Daily Forecast: Buying Over $26.46 Amid Middle East Tensions
As investors await the Federal Reserve’s upcoming monetary policy decision, they are also monitoring key US economic indicators like the ISM Manufacturing PMI and ADP Employment Change. These factors could sway market sentiment and impact the prices of precious metals.
On the US front, the broad-based US dollar maintained its upward momentum, reaching a weekly high of 106.40. This surge was fueled by the Fed’s hawkish stance on interest rates. The Federal Reserve is expected to keep interest rates unchanged at its May meeting and maintain its hawkish stance.
Besides, expectations for Fed easing have declined, with the likelihood of a June cut standing at around 10% and the probability of September rate cuts falling below 75%, according to the CME FedWatch tool.
Investors will be closely watching the Press Conference following the Fed meeting for further guidance. Therefore, the Fed’s hawkish tone could bolster the US dollar and cap further gains in the precious metals.
Impact of Geopolitical Tensions on Silver Price
On the geopolitical front, tensions are escalating as Israeli Prime Minister Benjamin Netanyahu announces plans for Israeli forces to enter Gaza’s southern city of Rafah, despite a ceasefire deal with Hamas. Meanwhile, UN chief Guterres expresses dissatisfaction with the slow progress on Gaza aid, urging Israel to prioritize the safety of humanitarian workers and facilitate urgent aid delivery to the enclave.
In the meantime, the International Court of Justice rejects Nicaragua’s request for emergency measures regarding German arms sales to Israel. In the United States, protests against Israel’s attacks persist, resulting in over 900 arrests in the past 11 days. However, the death toll from Israeli attacks on Gaza since October 7 has surpassed 34,000 Palestinians killed and nearly 78,000 wounded.
