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- Silver prices stumbled on risk aversion as traders turned to cash.
- Fed Bullard: Traders understood the Fed’s commitment to fighting inflation.
- NATO said the attack on Nord Stream 1 and 2 pipelines was caused by sabotage.
Silver prices slide for second time this week amid falling US Treasury yields as ‘aggressive’ tone from Fed officials, Europe’s energy crisis and Britain’s mini-budget presented by Kwasi Kuarteng, British Finance Minister under the government of Liz Truss, changed the sour sentiment. Therefore, XAG/USD is trading at $18.81 per troy ounce, 0.40% below its opening price.
On Thursday, Fed officials led by regional Fed chairs, along with Mester of Cleveland and St. Louis Bullard, reiterated that the Federal Reserve is compromised to fight inflation, even if that could trigger a recession. James Bullard said traders understood the Fed was serious about fulfilling the price stability mandate and added the need for higher rates for a “longer period”.
In the meantime, Loreta Mester said inflation is the main concern, added that there are no “cases of a downturn” and expects rates to peak at around 4.6%.
At the time of writing, San Francisco Fed’s Mary Daly said plunging the U.S. economy into a recession was not necessary to curb inflation, but added that “interest rates are necessary and appropriate”.
In the meantime, NATO said the Nord Stream pipeline leaks were caused by sabotage and noted that “NATO is committed to deterring and defending against hybrid attacks” and that “any A deliberate attack on Allied critical infrastructure would be met with a determined response.
Although news of the Nord Stream 1 and 2 pipelines spurred a spike in energy prices, WTI and Brent crude suffered losses of 0.46% and 0.54%, respectively.
Apart from that, new UK Prime Minister Liz Truss has doubled her tax cut budget, saying she is willing to take “controversial” decisions, although recent reports from the Guardian said she would hold a emergency meeting with the Bureau. Budget Responsibility (OBR) on Friday.
Given the fundamental backdrop, XAG/USD prices fell as traders looking for safety preferred to liquidate their positions and prepare for cash. Representing what was previously mentioned, US Treasuries remained contained during the session, while the US Dollar Index posted losses of 0.69%, down to 111.040.
Silver (XAG/USD) Major Technical Levels
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