Silver Price Forecast: XAG/USD rises to near $31.50 due to rising hopes of Fed rate cuts

• Silver price gains ground due to rising speculation of a Fed rate cut in September.
• Softer US labor data fueled speculation for two interest rate cuts by the Fed in 2024.
• A Reuters poll has indicated that nearly two-thirds of economists now predict a rate cut in September.

Silver price continues to gain ground for the third successive session, trading around $31.50 during the Asian hours on Friday. The appreciation of the grey metal can be attributed to the rising speculation of an interest rate cut by the US Federal Reserve (Fed) in September. This has followed a 25-basis points rate cut implemented by the European Central Bank (ECB) on Thursday.

The non-yielding assets like Silver could gain demand as the lower US labor data fueled hopes for two interest rate cuts by the Federal Reserve this year. Traders are likely to await further employment data from the US, including Average Hourly Earnings and Nonfarm Payrolls later in the North American session.

Initial Jobless Claims in the US increased by 8,000 to 229,000 for the week ending May 31, surpassing market expectations of 220,000. This marks the highest reading since the eight-month high of 232,000 recorded in early May. Traders await the release of US employment data releases on Friday, including the Average Hourly Earnings and Nonfarm Payrolls.

A Reuters poll conducted from May 31 to June 5 has indicated that nearly two-thirds of economists now predict an interest rate cut in September. Additionally, CME FedWatch Tool suggests the probability of a Fed rate cut in September by at least 25 basis points has increased to nearly 70.0%, up from 51.0% a week earlier.