Silver (XAG/USD) continues its upward trajectory, trading near $30.20 per troy ounce during the Asian trading session on Friday, following slight losses in the previous day. Traders are now closely watching U.S. labor market data, particularly the Nonfarm Payrolls (NFP) report, for further indications of the Federal Reserve’s monetary policy stance.
The precious metal, often seen as a safe-haven investment, has gained support due to ongoing inflation concerns and uncertainty surrounding potential tariffs under President-elect Donald Trump’s administration, according to the U.S. Federal Reserve (Fed). These factors have fueled demand for silver as a hedge against market instability.
However, the precious metal’s upside may be limited by rising long-term U.S. bond yields, which continue to climb amid heavy supply. The 10-year U.S. Treasury yield currently stands at 4.68%, while the 30-year yield is at 4.92%. This rise in bond yields reflects the Fed’s hawkish stance, as indicated by the Minutes from its December meeting.
The December FOMC Minutes revealed that Fed officials are concerned about inflationary pressures and the potential effects of President-elect Trump’s policies. As a result, the central bank has signaled a more cautious approach to rate cuts. Officials now expect two rate cuts in 2025, down from the previously forecasted four.
Meanwhile, escalating geopolitical tensions continue to drive market volatility, further boosting silver’s appeal as a safe-haven asset. On Thursday, four individuals were killed in shelling incidents in Ukraine, with both Russian and Ukrainian forces being blamed for the attacks. The violence in the Russian-controlled Zaporizhzhia region also led to two additional fatalities when the town of Kamyanka-Dniprovska came under Ukrainian fire, according to reports from Russia-appointed governor Yevgeny Balitsky, as reported by Reuters.
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