Spot Silver fell on Wednesday, erasing gains from the prior trading day while hovering above a two-week low ahead of speeches by Federal Reserve officials throughout the week that could provide further clues on the timing of potential interest rate cuts.
Yesterday Fed representatives said that if the economy performed in line with expectations, this could open the door to monetary policy easing.
Still, they noted the struggle against inflation was not done yet and the US central bank could take its time before cutting rates.
Several more Federal Reserve officials are scheduled to make public appearances this week.
Stronger-than-anticipated employment and services sector data urged market players to cut back on bets of a rate cut in May.
Markets are now expecting four 25 basis point Fed rate cuts this year, according to LSEG’s IRPR app.
As of 8:15 GMT on Wednesday Spot Silver was retreating 0.67% to trade at $22.278 per troy ounce. The commodity slipped as low as $22.245 on Monday, or its weakest price level since January 23rd.
Meanwhile, Silver Futures for delivery in March were down 0.56% to trade at $22.352 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was edging down 0.10% to 104.034 on Wednesday. Earlier this week, the DXY rose as high as 104.604, its strongest level since November 14th 2023.
“The U.S. dollar can be excused for being the weakest FX major on Tuesday, as it simply looks like a retracement against that bullish two-day move between Friday and Monday,” Matt Simpson, senior market analyst at City Index, was quoted as saying by Reuters.
“But let us not lose sight of the fact that the U.S. dollar index retains a bullish daily structure,” while a pullback to 103.50 could set it up for another move up.