Silver Price Forecast: XAG/USD jumps to near $31 as traders raise Fed dovish bets

LONDON (January 16) Silver price (XAG/USD) moves higher to near $31.00 in Thursday’s European session. The white metal gains as traders have raised bets supporting the Federal Reserve (Fed) to deliver more than one interest rate cut this year.

According to the CME FedWatch tool, traders are pricing in two interest rate cuts this year, the first coming in June instead of September, as forecasted before the December inflation data were released.

As measured by the Consumer Price Index (CPI), headline inflation accelerated to 2.9%, as expected; however, the core reading—which excludes volatile food and energy prices—surprisingly rose at a slower pace of 3.2%.

Typically, signs of acceleration in Fed dovish bets bode well for non-yielding assets, such as Silver.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher to near 109.00 but has corrected from the two-year high of 110.00. 10-year US Treasury yields edge higher to near 4.66% but have come down from its yearly high of 4.80%.

FXStreet