Silver maintained a stable position around $42.5 per ounce on Tuesday, remaining close to its 14-year high. This stability comes as investors anticipate a likely interest rate cut by the US Federal Reserve within the week. The market is almost entirely factoring in a 25 basis point decrease expected on Wednesday, with a total of 67 basis points projected to be reduced by the end of the year. These expectations are reinforced by recent data indicating a slowdown in the labor market and muted inflation rates. Additionally, President Donald Trump advocated for a more substantial cut from Fed Chair Jerome Powell, pointing to weaknesses in the housing market as a rationale.
In other global economic developments, central banks in Canada and China are predicted to implement policy easing measures this week, while monetary authorities in Japan and the UK are expected to maintain their current stances. On the geopolitical front, advancements were reported in the US-China trade discussions held in Spain, with a conversation between President Trump and Chinese President Xi Jinping planned for Friday. In industry-related news, strong demand from the solar, electric vehicle, and electronics sectors continues to exert pressure on the physical silver market, with supply limitations contributing to the ongoing support of silver prices.
