Silver Price Forecast: XAG/USD holds losses near $66.00 amid Fed rate hike bets

Silver price (XAG/USD) slipped near $66.00 on Tuesday, trading within a narrow range after a bullish opening. The hawkish remarks from the Federal Reserve (Fed) officials heightened expectations for further interest rate hikes in the United States. Fed officials Musalem and Goolsbee delivered distinctly hawkish tones, with their FXS Speechtracker scores of 8/10 and 7.4/10, respectively, exceeding their historical averages.

They warned that inflation could remain significantly above the 2% target for the next 18 months unless policy restraint is implemented. While the labor market is stable around full employment, underlying inflation is reported to be up to 3%, with businesses anticipating price increases similar to 3%. This hawkish sentiment reinforced the Dollar's position, as indicated by the FXS Fed Sentiment Index rising to 149.96, signaling a strong endorsement of additional tightening measures.

Geopolitical factors, particularly the potential resolution of the Middle East conflict and easing concerns over oil supplies, could provide support to silver prices. Meanwhile, the US Dollar benefited from the Fed's hawkish outlook and the geopolitical developments.