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silver Price Forecast: XAG/USD declines below $30.50 on slower US Fed rate cut buzz, firmer US Dollar
13 Jan 2025
Silver price drifts lower to around $30.20 in Monday’s early European session.
The anticipation of a more gradual approach to interest rate reductions by the US Federal Reserve (Fed) this year, in light of persistent inflation and a robust labor market, may further depress the price of the white metal in the short term. The US Bureau of Labor Statistics (BLS) reported on Friday that Nonfarm Payrolls (NFP) increased by 256,000 in December, surpassing the previous figure of 212,000 and exceeding expectations of 160,000. Furthermore, the Unemployment Rate decreased to 4.1% in December from 4.2% in November.
On the same day, St. Louis Fed President Alberto Musalem emphasized the need for caution regarding interest rate cuts, noting that the likelihood of inflation stabilizing between 2.5% and 3% has risen since the December meeting.
However, safe-haven demand stemming from uncertainties surrounding President-elect Donald Trump’s policies may help mitigate losses in Silver prices. Additionally, unprecedented industrial demand, particularly in sectors such as electronics, electric vehicles, and solar panels, is projected to elevate total demand to 1.21 billion ounces, despite a 16% decline in physical investment, thereby providing support for Silver prices.
