[ad_1]
Silver (XAG/USD) prices remain firmer around a two-week high near $19.65 in Thursday’s Asian session. In doing so, the shiny metal vindicates bullish signals from options markets after the US Federal Reserve (Fed) favored commodities and the Antipodes.
That said, the Fed matched market expectations by announcing a 75 basis point rate hike. The underlying reason for the pair’s weakness could be attributed to Fed Chairman Jerome Powell’s speech signaling that the hawks are running out of fuel. Powell’s main comments from the Fed were that rates had reached neutral, so there will be no more forward guidance, and rates will be decided meeting by meeting.
Of note, the one-month XAG/USD Risk Reversal (RR), an indicator of the spread between call and put options, hit the four-day high at the end of the trading day. Wednesday’s North American session, at +0.040 last. In doing so, the options market barometer justifies the optimism among commodity traders favored by the Fed’s latest actions.
Given the recent Fed-inspired run-up and firmer RR, silver prices are likely to maintain post-Fed advances ahead of second-quarter annualized U.S. gross domestic product (GDP), expected at 0.4% vs. -1.6% previously.
Also Read: US Gross Domestic Product Snapshot: Would the US Avoid a Technical Recession?
[ad_2]
Source link
