Silver Prices Forecasted to Decline Due to Strong Dollar and Increasing Treasury Yields

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At Extreme Investor Network, we provide cutting-edge analysis and insights into the stock market, trading, and Wall Street to help you make informed investment decisions. Today, we take a deep dive into the current state of the silver market amidst hawkish comments from Federal Reserve officials and rising U.S. Treasury yields.

Fed on Hold, Silver on Hold?

Silver bulls are proceeding with caution following remarks from Minneapolis Fed President Neel Kashkari, hinting at a delayed rate cut. While the Fed kept rates unchanged last week, Kashkari highlighted the need for more evidence of decreasing inflation before considering a shift in monetary policy. This cautious stance has left silver investors wondering about the metal’s near-term prospects.

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Treasury Yields Up, Silver Down?

With U.S. Treasury yields on the rise post-Kashkari’s comments, silver is facing some downward pressure. The attraction of non-interest-bearing silver diminishes when compared to the returns offered by bonds in a higher yield environment.

Silver’s Potential Upside

Despite the challenges, silver could benefit from a weaker dollar in the future. A weakening U.S. economy and expectations of further rate cuts could push the dollar lower, potentially boosting silver prices. Furthermore, lower interest rates could enhance silver’s appeal as an alternative investment.

Data Watch

This week’s focus lies on U.S. retail sales data on Tuesday, which could influence the dollar and silver prices. Investors are also keeping tabs on upcoming speeches from Fed officials and Friday’s flash PMI data for insights into the future path of monetary policy.

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Market Forecast: Near-Term Bearish, Long-Term Uncertain

Short-term challenges loom for silver amid a potentially stronger dollar due to delayed rate cuts. However, a shift towards dovish Fed policy later on and a weakening U.S. economy could present a buying opportunity for silver. The long-term outlook for silver hinges on the interplay between Fed policy and the U.S. economy’s health.

Technical Analysis

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