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New York silver futures rose more than 1.00% during the day and are now trading at $42.54 per ounce.On September 19th, South Koreas top trade negotiator stated that the country is continuing consultations with the United States on contentious issues such as visa restrictions and auto tariffs. These issues are crucial to the economic interests of both sides as Seoul strives to ease friction with Washington. South Korean Trade Minister Yeo Han-koo told reporters upon arriving in Incheon on Friday that he had just returned from Washington, where he met with U.S. Trade Representative Greer and key members of Congress to advance progress in negotiations. Yeo said he had urged the United States to quickly resolve visa issues for South Korean workers. Earlier this month, more than 300 South Korean employees were detained at a battery factory under construction in Georgia. The workers were released and returned home last week, but the immigration enforcement action has exacerbated tensions between the two countries and cast a shadow over the future of significant investment commitments made by South Korea in July under a new trade agreement. The broad agreement stipulates a 15% tariff on South Korean goods, a commitment reaffirmed by the two leaders at a White House summit last month. However, reaching a final agreement remains elusive due to disagreements over how to structure and implement the $350 billion investment package, a core component of the deal.On September 19th, Nomura published a report assigning a target price of HK$121.80 to Anta Sports (02020.HK) with a "buy" rating. The report stated that Antas full-year sales target for fiscal year 2025 remains unchanged. Following a rebound in sales momentum in August, sales have fluctuated somewhat since September. FILAs third-quarter sales are expected to benefit from a low base, while Antas third-quarter sales are expected to be slightly lower than the third quarter of last year.Dovish 1. Bank of Japan member Asahi Noguchi: Given the uncertain economic outlook, the Bank of Japan should refrain from adjusting interest rates and should closely monitor economic developments. 2. Bank of Japan Deputy Governor Shinichi Uchida: We must pay attention to downside risks facing Japans economy and prices, and the Bank of Japan must currently support the economy through accommodative monetary policy. Neutral 1. Bank of Japan member Kazuyuki Masuda: We do not strongly disagree with the view that Japans overall inflation has not yet reached 2%; considering various economic risks, the Bank of Japan should not rush to raise interest rates. 2. Bank of Japan member Junko Koeda: Given the current high level of uncertainty, it is not appropriate to discuss the specific timing of the next rate hike. We need to closely monitor the economy, inflation, and financial markets before making a decision. 3. Bank of Japan Governor Kazuo Ueda: If the economy and prices develop as expected, we will not change our stance on raising interest rates. We will carefully examine whether the economy and prices meet our forecasts without preconceived views. 4. Bank of Japan member Junko Nakagawa: If the outlook for economic activity and prices is realized, the Bank of Japan will continue to raise the policy rate. We will make appropriate monetary policy decisions through continuous and prudent data assessment. 5. Bank of Japan Deputy Governor Yoshizo Himino: If the economy and prices perform as expected, the Bank of Japan is expected to gradually raise interest rates. As for the timing of rate hikes, we can only say that we hope to ensure that they are not raised too early or too late. Hawkish 1. Bank of Japan board member Hajime Takada: The Bank of Japan has only paused its rate hike cycle for now and should continue to adjust and shift after a period of observation. The Bank of Japan needs to return to a rate hike cycle in a flexible manner. 2. Bank of Japan board member Naoki Tamura: We are likely to achieve our inflation target earlier than expected. Even if uncertainty about US tariffs persists, the Bank of Japan may still need to raise interest rates decisively to address inflation risks.Gold prices fell for a third consecutive day on September 19th as traders grew more cautious about the prospect of Federal Reserve rate cuts and a stronger dollar curbed the precious metals recent gains. Gold prices are now about $70 below Wednesdays all-time high, which was driven to a record high by the Feds 25 basis point rate cut. Gold prices subsequently retreated after Fed Chairman Powells comments on the path of monetary policy were more hawkish than expected, stating that officials would take a "meeting-by-meeting" approach to further easing. Looking ahead, attacks on the Feds independence from the US government could further fuel golds gains. Governor Lisa Cook is embroiled in a legal dispute with President Trump, who sought to fire her over mortgage fraud allegations. Government economic advisor Stephen Milan, who was quickly appointed to fill a temporary vacancy at the Fed, was the only member of the board who dissented from the 25 basis point rate cut at Wednesdays meeting, favoring a 50 basis point cut instead.

Forecast for Silver Price: XAG/USD to fall to $25.00 as supply concerns subside and risk aversion increases

Daniel Rogers

Apr 20, 2023 13:46

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During the early hours of Thursday, the price of silver (XAG / USD) falls to $25.20, a new intraday low. In doing so, the precious metal records its first daily loss in three days, as concerns of a supply crisis subside and a risk-averse mood prevails.

 

Wednesday, Reuters cited the Silver Institute's annual prognosis report, which stated that global silver demand increased by 18% to a record high of 1.24 billion ounces last year, resulting in a massive supply deficit. According to the report, "The Silver market was undersupplied by 237.7 million ounces in 2022, the institute said in its most recent World Silver Survey, calling this 'possibly the largest deficit on record'."

 

On the other hand, higher inflation indicators from the United Kingdom, the Eurozone, and the United States, along with hawkish comments from the Bank of England (BoE), European Central Bank (ECB), and Federal Reserve (Fed), increase the likelihood of rate increases and dampen investor sentiment. John Williams, president of the Federal Reserve Bank of New York, is one of the Fed's most recent policy advocates. In May, he voiced support for an interest rate hike of 0.25 percentage points and said, "We will use monetary policy tools to restore price stability." Before him, the president of the Federal Reserve Bank of Chicago, Austan Goolsbee, highlighted the strength of the credit market as one of the most important catalysts to monitor prior to the next Fed monetary policy meeting.

 

With this, market participants increase their wagers on the central bank's 0.25 percentage point rate hike in May to at least 85 percent and reduce the likelihood of a rate cut in 2023.

 

It should be noted that the UK's allegations of China's hidden motive to clamp down on Western infrastructure and the US House China Committee's discussion on the Taiwan invasion scenario rekindle the West vs. China conflict narrative and impact on sentiment. On the same line are the concerns surrounding the probable drag on the US debt ceiling decision as a result of US President Joe Biden's reluctance to raise debt limits.

 

In addition, Reuters reported that US consumers are falling behind on their credit card and loan payments as the economy weakens, which also puts pressure on the XAG/USD exchange rate.

 

In this context, S&P 500 Futures have recorded their first daily loss in four days, falling 0.25 percent intraday to 4,168 as of press time. However, the US 10-year and 2-year Treasury bond yields hover around 3.60 percent and 4.25 percent, respectively, after reaching new monthly highs the day before. The US Dollar Index (DXY) fluctuates around 102.000 after rectifying its adverse bias from the previous day.

 

Considering the future, the recent emphasis on qualitative news highlights them as the most important risk indicator. Nonetheless, the US Weekly Initial Jobless Claims, Philadelphia Fed Manufacturing Survey, and Existing Home Sales should be monitored for fresh impulses.


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