Silver Price News: XAG/USD leans bullish above $19.00 on post-Fed options market optimism
Silver (XAG/USD) prices remain firmer around a two-week high near $19.65 during Thursday’s Asian session. In doing so, the bright metal justifies the upbeat signals from the options markets after the US Federal Reserve (Fed) favored commodities and Antipodeans.
That said, Fed matched market forecasts by announcing a 75-bps rate increase. The underlying reason for the pair’s weakness could be attributed to Fed Chairman Jerome Powell’s speech as it signaled that the hawks are running out of fuel. Key comments from the Fed’s Powell were that the rates had reached neutrality, so there won't be any more forward guidance, as well as rates will be decided meeting by meeting.
It’s worth noting that the one-month XAG/USD risk reversal (RR), a gauge of the spread between call options and put options, rallied to the four-day high by the end of Wednesday’s North American session, to +0.040 at the latest. In doing so, the options market barometer justifies the commodity traders’ optimism favored by the Fed’s latest actions.
Given the recent Fed-inspired run-up and the firmer RR, silver prices are likely to keep the post-Fed advances ahead of the US Q2 Gross Domestic Product (GDP) Annualized, expected 0.4% versus -1.6% prior.
Also read: US Gross Domestic Product Preview: Would the US avoid a technical recession?
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.
