Silver Price: XAG/USD declines to near $30.30 as Fed to back fewer interest rate cuts in 2025

LONDON (December 17) Silver price (XAG/USD) slumps to near $30.30 in Tuesday’s European session. The white metal weakens as bond yields stay firm on expectations that the Federal Reserve (Fed) will signal fewer interest rate reductions in 2025 after reducing key borrowing rates by 25 basis points (bps) to 4.25%-4.50% in the monetary policy meeting on Wednesday.

10-year US Treasury yields extend their winning streak for the seventh trading day on Tuesday, rises to near 4.42%. Higher yields on interest-bearing assets bode poorly for non-yielding assets such as Silver as they increase their opportunity cost. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, moves higher around 107.00.

According to a Bloomberg survey, the Fed is expected to cut interest rates three times in 2025. Fed’s policy-easing cycle would be more gradual as economists worry about rising upside risks to inflation than downside risks to employment.

Investors will pay close attention to Fed Chair Jerome Powell’s press conference to get cues about to what extent policies by incoming US President Donald Trump, such as immigration, trade and taxes, will influence inflationary pressures and interest rates.

FXStreet