- Silver price rebounds from a three-week low of $29.11 recorded on Friday.
- Non-yielding Silver struggled as the probability of a Fed rate cut in September decreased compared to the previous week.
- Rabobank suggested that the Fed may cut rates in September and December, more likely because of a deteriorating economy.
Silver price recovers the previous session's losses, trading around $29.50 per troy ounce during Monday's Asian hours. The better-than-expected US employment data released on Friday has caused traders to delay their expectations of a Fed rate cut. This sentiment has put pressure on non-yielding assets like Silver.
According to the US Bureau of Labor Statistics (BLS), May's US Nonfarm Payrolls (NFP) increased by 272,000, up from 165,000 in April. The stronger employment data has attracted buyers to the US Dollar (USD), which has dampened the demand for Silver by making the commodity more expensive for buyer countries using other currencies.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, continues to rise due to higher US Treasury yields. The DXY extends gains to near 105.20 with 2-year and 10-year yields on US Treasury bonds standing at 4.88% and 4.44%, respectively, at the time of writing.
A strong US jobs report could cause the Federal Reserve to keep higher rates for an extended period. According to the CME FedWatch Tool, the probability of a Fed rate cut of at least 25 basis points in September has decreased to nearly 48.0%, down from 54.8% a week ago.
However, Rabobank suggested in its report that the Fed may cut rates in September and December, more likely because of a deteriorating economy. This is because they think that the US economy is entering a stagflationary phase with persistent inflation and an economic slowdown that is likely to end in a mild recession later this year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds steady around 0.6500 ahead of monthly Australian CPI
AUD/USD trades with a positive bias for the third straight day as the Iran-Israel ceasefire continues to erode the safe-haven appeal of the USD, despite Powell's hawkish remarks on Tuesday, and benefit the risk-sensitive Aussie. Traders now look to monthly Australian consumer inflation figures for a fresh impetus ahead of Powell's second day of congressional testimony.
USD/JPY hangs near one-week low amid mixed cues
USD/JPY remains depressed below the 145.00 mark, marking a one-week low following the release of strong Services PPI from Japan, which supports the case for more BoJ rate hikes and underpins the JPY. Meanwhile, the USD struggled to attract buyers after Fed's Powell reaffirmed the wait-and-see rate policy.
Gold price ticks higher on weaker USD; upside seems limited
Gold price is looking to build on the previous day's bounce from sub-$3,300 levels, or over a two-week low, amid the prevalent USD selling bias. However, Powell's hawkish tone could limit deeper USD losses. Furthermore, the Israel-Iran ceasefire optimism might cap the yellow metal.
Circle stock plunges 15%, analysts predict bearish pressure from key long-term headwinds
Circle shares slid 15% on Tuesday following analysts' predictions that declining interest rates and competition from other stablecoin issuers would affect its long-term growth.
Could Iran block the Strait of Hormuz? Why Oil is on edge after US strikes
As the Israel-Iran conflict reaches new heights, an old threat is coming back to haunt the markets: that of the closure of the Strait of Hormuz. This narrow arm of the sea in the Persian Gulf, wedged between Iran to the north and the United Arab Emirates and Oman to the south, is much more than a simple sea passage.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.