Conversely, the risk of heightened geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict limited the decline in silver prices.
Traders are cautious before taking strong positions, particularly with key US macroeconomic data, including the US Personal Consumption Expenditures (PCE) Price Index, scheduled for release on Friday.
Federal Reserve Policy and Economic Indicators on Silver Prices
The Federal Reserve’s hawkish stance at its June meeting, indicating a likelihood of only one interest rate cut by year-end, has bolstered US Treasury bond yields and strengthened the US Dollar, contributing to silver’s losses.
Recent government data showed an 11.3% drop in New Home Sales for May, the lowest level since November, suggesting an economic slowdown despite easing inflation.
Despite these signals, the stronger US Dollar and the Fed’s stance have pressured silver prices, contrasting with market expectations of potential Fed rate cuts.
Looking ahead, traders remain cautious ahead of the US presidential debate and Friday’s release of the US Personal Consumption Expenditures (PCE) Price Index, a key inflation measure for the Fed.