Silver held steady while investors kept evaluating the Fed’s monetary policy

Silver prices saw a small increase of 0.1% to close at 82496 as investors kept a close eye on the Federal Reserve’s monetary policy path after the US Personal Consumption Expenditures (PCE) data was released. The annual rates exceeded projections, even though the monthly key and core inflation rates aligned with expectations.

This highlights ongoing pricing risks that were mentioned in previous reports. High-interest rates threaten the demand for non-yielding assets like silver, even though market expectations have decreased to just one Fed interest rate reduction this year from three previously projected cuts. Still, the metal’s appeal as a haven amid ongoing uncertainty contributed to some of its slide.

Silver was under pressure all week, headed for an almost 4% decline, due to lessened tensions in the Middle East and the increasing likelihood of a postponed Fed tightening cycle. In addition, the US consumer confidence index from the University of Michigan was lowered to 77.2 in April 2024.

The cautious feeling was further reinforced by the US economy’s disappointing Q1 2024 expansion of 1.6%, the lowest level in two years. Positively, personal expenditure in the US increased by 0.8% in March 2024, matching February’s growth rate, above market expectations.

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