Silver Prices: XAG/USD clings to gains near $30.50 as weak US data boosts Fed rate-cut bets

NEW YORK (July 4) Silver price (XAG/USD) turns sideways near $30.50 in Thursday’s New York session after a strong upside move on Wednesday. The white metal stays quiet amid holiday in the United States (US) markets on account of Independence Day.

The white metal witnessed strong buying interest as market speculation for the Federal Reserve (Fed) to begin reducing interest rates from September strengthened further. The expectations for early Fed rates cuts grew due to weak US data.

On Wednesday, the ADP Employment data showed an unexpected decline in private payrolls for June, which indicated that the labor market strength is ebbing. In the same period, a sharp contraction in the ISM Services PMI suggested that the economy lost momentum in the second quarter.

The number of individuals hired by the private sector came in lower at 150K from estimates of 160K and the prior release of 157K. Meanwhile, the Services PMI, which represents the service sector that accounts for two-thirds of the economy fell to its lowest in four years. Also, New Orders contracted significantly and Prices Paid expanded at a slower pace.

Rising Fed rate cut bets have weighed heavily on the US Dollar. The US Dollar Index (DXY) has dropped to near 105.20.

Going forward, investors will shift focus to the US Nonfarm Payrolls (NFP) data for June, which will be published on Friday.

FXStreet