Spot Silver gains with focus set on FOMC minutes

Spot Silver rose on Wednesday on the back of a softer US Dollar and also underpinned by safe haven buying, as focus sets on the minutes of the Federal Reserve’s January policy meeting due out later in the day.

The FOMC minutes could provide more clues regarding the timing of the central bank’s potential interest rate cuts.

The Fed is anticipated to cut the federal funds rate as soon as June, according to a Reuters poll of economists. Yet, the greater risk is that the first rate cut may come later than projected rather than earlier, the poll showed.

Lower interest rates tend to decrease the opportunity cost of holding Silver, which pays no interest.

Federal Reserve Bank of San Francisco President Mary Daly acknowledged “remarkable” progress made on inflation, but also noted there was “more work to do” to ensure price stability.

Meanwhile, attacks on shipping lanes in the Red Sea and Bab al-Mandab Strait by Iran-aligned Houthis continued, as four more vessels were reportedly hit by drone and missile strikes since Friday.

As of 8:16 GMT on Wednesday Spot Silver was gaining 0.57% to trade at $23.141 per troy ounce. The commodity has pulled back from a three-week low of $21.936, which it registered on February 14th.

Silver Futures for delivery in March were edging up 0.15% to trade at $23.170 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.02% to 103.675 on Wednesday.