Silver Prices Fall Amid US Dollar Strength and Rising Unemployment Claims
Despite expectations for a Federal Reserve rate cut in September, the US dollar has gained strength, driving silver prices lower. Recent data from the Bureau of Labor Statistics shows a rise in unemployment claims to 243,000, marking the highest 4-week average in over two and a half years, signaling a weakening job market.
This, combined with decreasing inflation, suggests that the Fed might soon begin its rate cuts. Positive US manufacturing data and market predictions point to a 100% probability of a rate cut in September, with two more cuts expected by the end of the year.
The US dollar’s strength and increased unemployment claims are pressuring silver prices lower. However, expectations for Fed rate cuts and strong manufacturing data could offer some support.
Geopolitical Tensions and Humanitarian Crisis Could Boost Silver Prices Amid Decline
Former President Donald Trump’s comments about Taiwan paying the US for defense have raised doubts about America’s willingness to protect Taiwan from China. This uncertainty, along with ongoing conflicts in the Middle East and the Russia-Ukraine war, could support silver prices as investors seek safe-haven assets.
In the last 24 hours, Israel’s intensified strikes on Gaza have killed at least 54 Palestinians, worsening the humanitarian crisis. Israel has drastically reduced Gaza’s water supply, creating severe health issues. Saudi Arabia criticizes the attacks as violations, and fears of a broader Middle East conflict grow.
The geopolitical uncertainty, including doubts about US support for Taiwan and escalating Middle East conflicts, could boost silver prices as investors seek safety. However, silver’s recent decline is due to a strong US dollar.
Short-Term Forecast
Silver (XAG/USD) is likely to remain bearish around $29.52, pressured by a strong US dollar. However, geopolitical tensions might offer some support, potentially stabilizing prices.
