Spot Silver pulled back from a 1-week high of $33.25 on Wednesday, since optimism over potential US-China trade negotiations heightened investor risk appetite, while weighing on safe-haven assets.
US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are set to meet with Chinese Vice Premier He Lifeng in Switzerland this weekend. Bessent’s recent comments that several trade agreements could be announced soon have also added to the overall optimistic mood.
Moreover, global sentiment received a further boost after the People’s Bank of China announced measures intended to stimulate the economy. Governor Pan Gongsheng said the central bank was planning to reduce the seven-day reverse repurchase rate by 10 basis points to 1.4%.
In addition, the reserve requirement ratio for banks will be cut by 50 basis points. This will mark the injection of around 1 trillion yuan, equivalent to approximately $214 billion, of liquidity into the Chinese financial system.
Market focus now sets on the outcome of the Federal Reserve’s policy meeting.
The Fed is widely expected to leave its federal funds rate target range intact at 4.25%-4.50% at its May 6th-7th meeting.
The minutes of the FOMC meeting in March showed that policy makers expected inflation would be pushed higher this year because of the impact of elevated tariffs, though they acknowledged considerable uncertainty over the magnitude and persistence of these effects.
Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell for clues over the timing of any future interest rate cuts.
About 80 basis points of Fed rate cuts by year-end are now priced in, with the first cut likely occurring in July.
Spot Silver was last down 1.30% on the day to trade at $32.79 per troy ounce.
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