Silver Price: XAG/USD breaks below $30.00 due to improved risk sentiment

LONDON (November 14) Silver price (XAG/USD) extends its losses to two-month lows, trading around $29.90 per troy ounce during the European hours on Thursday. This downside of the safe-haven Silver is attributed to improving risk sentiment since Donald Trump’s election victory last week.

The US Dollar (USD), equities, and cryptocurrencies are advancing as markets anticipate strong growth and higher inflation under the incoming Trump administration. The proposed policies could drive increased investment, spending, and labor demand, raising inflation risks.

The dollar-denominated Silver faces challenges due to solid US Dollar (USD). The US Dollar Index (DXY), which measures the value of the US Dollar against its six major peers, holds steady around 106.60, its highest level since November 2023.

The US Dollar also gains support from rising US Treasury yields, with the 2-year and 10-year yields standing at 4.29% and 4.46%, respectively, at the time of writing. Additionally, these higher yields are exerting downward pressure on non-yielding assets like Silver.

The non-interest-bearing assets like Silver might have received downward pressure from less dovish remarks by Federal Reserve (Fed) officials on Wednesday. St. Louis Fed President Alberto Musalem remarked that ongoing inflationary pressures make it challenging for the Fed to maintain a course of rate cuts. Musalem shifted focus to the robustness of the US labor market, aiming to ease concerns about inflation's resistance to the Fed's efforts to reduce it.

Federal Reserve Bank of Kansas City President Jeffrey Schmid highlighted potential challenges in the journey toward lowering interest rates. Schmid also criticized market participants who continue to hold out hope for a return to near-zero rates, calling their expectations unrealistic.

FXStreet