XAG/USD lowers around $29.50 ahead of Jackson Hole Symposium

• The price of silver is moving sideways as traders remain cautious ahead of the annual Jackson Hole Symposium scheduled for August 22-24.
• Fed Chairman Jerome Powell will address the potential for interest rate cuts at the Annual Symposium on Friday.
• Silver could find support from refugee flows amid the lack of a cease-fire agreement between Israel and Hamas.

The price of silver (XAG/USD) fell to near $29.50 per troy ounce during European hours on Thursday. Traders are focused on Federal Reserve Chairman Jerome Powell’s upcoming speech at the annual Symposium in Jackson Hole on Friday, where he is expected to address the potential for interest rate cuts in the United States.

The downside for non-yielding silver could be limited as the Federal Reserve is expected to implement 100 basis points (bps) in interest rate cuts by the end of this year. However, there is some disagreement among market analysts on whether the Fed will opt for a 25 or 50 basis point cut at its September meeting. Lower interest rates would make commodity assets like silver more attractive to investors because they can offer better returns in a low-rate environment.

CME’s FedWatch tool suggests markets are now pricing in a nearly 65.5% odds on a 25 basis point (bps) Fed rate cut at its September meeting, down from 71.0% a day ago . The probability of a 50 basis point rate cut rose to 34.5% from 29.0% a day earlier.

The minutes of the FOMC’s July policy meeting indicated that most Fed officials agreed last month that they were likely to cut their benchmark interest rate at the next meeting in September as long as inflation continued to cool.

Silver’s refuge could find support amid the ongoing impasse over securing a truce deal between Israel and Hamas, raising the risk of a wider conflict in the Middle East. On Wednesday, US President Joe Biden urged Israeli Prime Minister Benjamin Netanyahu to prioritize a ceasefire in Gaza and the release of the hostages, but both Israel and Hamas remained steadfast in their demands.

Vice President Kamala Harris also joined the conversation following reports from Palestinian health officials that Israeli airstrikes had killed at least 50 Palestinians in the past 24 hours, according to a Reuters report.