Silver Price Forecast: XAG/USD falls to near $66.00 amid Fed Chair Warsh’s hawkish tone

Silver price (XAG/USD) continued its decline for the second day in a row, trading near $66.10 per troy ounce during Asian trading hours on Monday. This drop came after Federal Reserve Chair Kevin Warsh voiced hawkish remarks at the Jackson Hole symposium, emphasizing that policymakers would need to work to ensure that cost-of-living pressures ease for Americans.

Warsh stated, "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed, otherwise, we have work to do." The Federal Reserve's next interest rate decision is expected on September 15-16, with markets now pricing in a 57.5% chance of a 25 basis points (bps) hike next month, up from 35% before Warsh's speech.

Additionally, higher oil prices have put pressure on silver, following Iran's coordinated missile strikes across several Iranian cities in response to a U.S. airstrike on Iranian missile sites at Larak Island. The U.S. strike marked the first direct attack on Iranian military positions in over a month. Analysts note that the backdrop for precious metals has improved as investors reassess the Fed's policy stance and the outlook for the Dollar, leading to renewed interest in silver as a potential hedge against high inflation.