Silver Price News: XAG/USD bulls approach $26.00 on dovish Fed hike, upbeat options market signals

Anil Panchal FXStreet

Silver price (XAG/USD) grinds higher during a three-day uptrend to early Thursday in Asia, near up 0.50% intraday near $25.70 by the press time. In doing so, the bright metal justifies the US Federal Reserve’s (Fed) hesitance in suggesting further rate hikes, despite lifting the benchmark rates by 0.25%, as well as the upbeat options market sentiment.

That said, the one-month risk reversal (RR) of the Silver price, a gauge of the spread between the call and put options, prints the strongest bullish level of 0.1000 in three weeks by the end of Wednesday’s North American session. It’s worth noting that the daily RR dropped the most since April 18 the previous day. Even so, the Silver options market signals remain bearish for May, after a downbeat April.

Given the recently upbeat options market signals, coupled with the US Dollar’s failure to cheer the Fed’s rate hike, the Silver price may witness further advances.

However, today’s European Central Bank (ECB) decision and the risks surrounding the US default and banking crisis will be the key to watch for fresh impulse.

Also read: Forex Today: Dollar slides as Fed delivers as expected

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD bounces off multi-month low; bulls seem hesitant above mid-0.6800s

AUD/USD edges higher during the Asian session on Wednesday, recovering some of the previous day’s losses to its lowest level since March as the US Dollar stalls the hot US CPI-inspired rally amid hopes of a US-Iran peace deal. Meanwhile, hawkish comments from FOMC members have raised odds for a 50 bps rate hike in December, which favors USD bulls and should cap the Aussie amid expectations of a cautious, on-hold RBA stance.

USD/JPY remains capped below 159.00 amid looming intervention risks

USD/JPY struggles to build on the previous day’s strong gains to a near one-month top as intervention risk supports the Japanese Yen while hopes of a US-Iran peace deal cap the safe-haven US Dollar. Meanwhile, traders have started pricing in the probability of a 50 bps Fed rate hike in December in reaction to Tuesday’s hot US CPI report and hawkish comments from FOMC members. This favors USD bulls and should limit the downside for the currency pair.

Gold seems vulnerable below $4,050 as hawkish Fed bets favor USD bulls

Gold steadies following the overnight decline, trading near $4,035-$4,040 during the Asian session on Wednesday as US-Iran peace deal hopes cap the post-US CPI US Dollar rally. Meanwhile, the possibility of a jumbo 50 bps Fed rate hike in December could limit the downside for the USD and cap the non-yielding bullion, warranting caution for bullish traders.

Bitcoin, crypto market fall as hot US inflation triggers $700 million in liquidations

Bitcoin declines toward $73,000 on Tuesday following October's hotter-than-expected US Consumer Price Index report, which triggered renewed concerns about the Federal Reserve's interest rate outlook.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.