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Brazilian President Lula: Next week I will speak with leaders of France, Britain, Germany and the European Union.White House trade adviser Navarro: (Regarding Trumps threat to sue Powell) I will not get involved in this matter.On Tuesday, August 13th, U.S. Treasury Secretary Benson expressed optimism in an interview with Fox Business Channel that the Senate would confirm Stephen Milan, current Chairman of the Council of Economic Advisers, to the temporary vacancy on the Federal Reserve Board before the Feds September meeting. Bessant revealed that President Trump is conducting a wide-ranging search for candidates to fill the permanent vacancy on the Federal Reserve Board next January and is keeping a very open mind. He even revealed that the president has considered nominating former Federal Reserve Chair Janet Yellen. "This isnt an ideological issue; its about economics—whats best for the American people and whats best for the economy," Bessant emphasized.On August 13, the Wall Street Journal reported that Federal Reserve Chairman Barkin stated that there are numerous signs that low- and middle-income consumers are facing greater financial constraints than they were a few years ago, which could curb their spending and mitigate the inflationary impact of tariffs. "The theory that the cost of (tariffs) will inevitably be passed on, leading to a surge in inflation, will have to be tested by consumer reaction," he said. "I believe consumers will accept price increases on some essential goods, but will inevitably resist price increases in other areas by downsizing or delaying purchases." Regarding the inflation outlook, Barkin noted, "We will see some inflation, but it will be milder than expected because this is not 2022, when consumers had ample cash and a strong desire to spend. The reality in 2025 is that consumers are feeling the pinch and are therefore forced to be frugal."The API crude oil production in the United States in the week ending August 8 was 43,000 barrels per day, compared with 76,000 barrels per day in the previous week.

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.