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Silver\u2019s losses on Wednesday and Thursday were in line with weaker gold prices. The two metals reacted negatively to comments from US Fed officials this week which cast doubt on the prospects for interest rate cuts in September, as the markets had been expecting.<\/p>\n\n\n\n
Some Fed officials even signalled the possibility of interest rate hikes if needed to curb persistent inflation, and the markets now appear to favour November as the most likely date for any rate cuts, compared with September previously.<\/p>\n\n\n\n
The prospect of a continuation of the current rate of 5.25-5.5% for several more months represents a headwind for gold and silver as non-interest-bearing assets.<\/p>\n\n\n\n
Nevertheless, the recent drop for silver prices comes in the context of an 11-year high of well over $32.00 an ounce on Tuesday, as precious metals remain supported by heightened geopolitical tensions and strong interest from central banks and investors as a hedge against inflation and currency weakness.<\/p>\n\n\n\n
The markets will likely be eyeing the psychologically important $30.00 an ounce level to see if fresh buying will emerge below that mark that would support the market and stem further losses. However, if further downward moves do occur, the early May dip to just above $26.00 an ounce would be another key level to watch.<\/p>\n\n\n\n
Looking ahead, Friday\u2019s US durable goods orders for April may provide further clues on the state of the US economy, followed by the Michigan consumer sentiment figures for May.<\/p>\n\n\n\t\t\t