Silver prices sank to three-month lows, with XAG/USD trading around $29.50 following a series of hawkish signals from central banks, including the Federal Reserve. Market participants have reacted to persistent global interest rate hikes, which have provided strength to the U.S. Dollar and pressured precious metals like silver. The decline reflects broader risk sentiment, as traders continue to digest inflation data and tightening policy across major economies.
The downward momentum comes amid rising concerns over tightening financial conditions, particularly in the U.S., where bond yields have continued to climb. The pressure on silver has been exacerbated by market expectations of further Fed tightening, which is likely to impact non-yielding assets like precious metals. Silver has traditionally struggled in high-rate environments, and analysts predict more weakness if U.S. Treasury yields maintain their upward trajectory.
In the absence of fresh, bullish catalysts, silver remains under substantial downside pressure, with the metal testing critical levels near $29.00. Some traders have speculated that a possible economic slowdown in key markets could reignite safe-haven demand for silver. However, silver faces a tough battle against broader market sentiment favoring the U.S. Dollar and risk-off assets in light of global uncertainties.
The key challenge ahead for silver prices will be any changes to central bank rhetoric, particularly the Fed’s stance on further rate hikes. For now, XAG/USD’s outlook remains cautious, with downside risks outweighing any potential upside. Until there is a shift in policy direction or macroeconomic data, silver is expected to face continued pressure.
