However, the upward momentum may be challenged by positive risk sentiment and a strong US dollar, which typically limit silver’s gains.
US Dollar Strengthens Amid Inflation Data and Fed Rate Cut Expectations
The US dollar is gaining strength despite market expectations of a 25-basis point Fed rate cut in September, with some anticipating a larger 50-basis point cut. This dollar strength is likely driven by anticipation of upcoming US inflation data.
However, this boost may be short-lived due to the expected rate cut and overall optimistic market sentiment.
In a risk-on environment, where investors are more willing to take risks, safe-haven assets like the US dollar typically face challenges.
Fed Uncertainty and Inflation Data Shape US Dollar and Silver Price Outlook
Despite various factors supporting the dollar and preventing significant declines, Fed Governor Michelle Bowman noted on Sunday that the Fed might not be ready to cut rates in September, citing inflation risks and a strong labor market.
However, this has not significantly boosted the US dollar or impacted silver prices.