On the US front, the broad-based US dollar weakened amid growing expectations that the Federal Reserve will start interest rate cuts later this year. This sentiment was bolstered by recent soft US economic data, revealing weaknesses in the labor market and signs of economic slowdown.
Moreover, minutes from the latest FOMC meeting underscored policymakers’ concerns about a gradual cooling of the US economy. Consequently, US Treasury bond yields declined, driving the US dollar to a three-week low.
US private-sector employment reported a modest increase of 150,000 jobs in June, slightly below expectations and down from 157,000 in the previous month. The Labor Department noted a rise in unemployment benefit claims to a 2.5-year high, indicating softening labor market conditions.
Additionally, the Institute for Supply Management’s Services PMI for June fell to 48.8, signalling contraction and marking its lowest level since May 2020, which was below market forecasts. These reports suggest ongoing challenges in the US economy, influencing Federal Reserve decisions on interest rates.
Therefore, the weaker US dollar, driven by expectations of Fed rate cuts and soft economic data, may support silver prices by reducing the dollar-denominated cost of silver and increasing investor interest in precious metals.
Short-term Forecast
