Silver Price Forecast: XAG/USD plummets to near $63.60 after Fed Williams’ hawkish remarks

During the European trading session on Thursday, the silver price (XAG/USD) experienced a decline of 1.25%, reaching near $63.60. This fall in silver prices was primarily due to hawkish remarks made by John Williams, a member of the New York Federal Reserve (Fed) Bank, during the European trade. Williams' comments indicated that the central bank is concerned about rising inflation and is confident about the job outlook.

He stated that another interest rate hike by the end of the year is "reasonable." Williams' speech received a notably firm score of 7.2/10 on the FXS Speechtracker, which is higher than the 6.2/10 historical average, reinforcing confidence in the US economic resilience and reduced risks of maximum employment. The Fed's stance suggests that further tightening measures might be considered, although explicit guidance has been toned down.

The FXS Fed Sentiment Index decreased by 0.18 points to 148.63, signaling a modest decline in perceived hawkishness but still remaining hawkish. US Treasury Yields have risen due to increased expectations of more frequent Fed rate hikes. This increase in yields has put pressure on silver prices, as non-yielding assets become less attractive.

The 10-year US Treasury Yield reached near 5.14%, the highest level in over 19 years. Silver, being a precious metal used as a store of value and a medium of exchange, can be influenced by various factors such as geopolitical events, economic conditions, and investor sentiment. Its price is also affected by the behavior of the US Dollar, as it is traded in dollars (XAG/USD).