- Silver price climbs to around $37.90 in Tuesday’s Asian session, up 0.73% on the day.
- Fed rate cut bets provide some support to the white metal.
- Optimism in financial markets might cap the upside for safe-haven assets like Silver.
The Silver price (XAG/USD) attracts some buyers near $37.90 during the Asian trading hours on Tuesday. The white metal edges higher amid rising expectations that the US Federal Reserve (Fed) will deliver an interest rate cut in its September meeting. Investors will take more cues from the key US inflation data later on Tuesday.
Soft US job data for July reinforced the view that the US central bank is likely to pivot toward accommodation sooner rather than later. Furthermore, the dovish remarks from the Fed officials undermine the US Dollar (USD) and lift the USD-denominated commodity price. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding white metal.
Money market traders are now pricing in around a 90% chance of a rate cut in the September meeting, while 58 basis points (bps) of reduction are priced in by year-end, implying two quarter-point cuts and around a one-in-three chance of a third, according to the CME FedWatch tool.
On the other hand, market sentiment shifted toward optimism in recent sessions, which might have curbed precious metals’ appeal as a defensive asset. US President Donald Trump announced late Monday to delay implementing sweeping tariffs on China, extending another 90 days just hours before the last agreement between the world’s two largest economies was due to expire.
