Silver Price Forecast: XAG/USD appreciates to near $31.00 ahead of Powell’s testimony

• Silver price gains ground as weaker employment data raise the odds of the Fed reducing rates in September.
• The CME's FedWatch Tool indicates that the odds of a Fed rate cut in September have increased to 76.2%, up from 65.5% a week earlier.
• The safe-haven Silver could face challenges due to anticipated progress in ceasefire negotiations in the Gaza war.

Silver price (XAG/USD) recovers its recent losses, trading around $31.00 per troy ounce during the European session on Tuesday. Traders await Federal Reserve Chairman Jerome Powell’s testimony on "The Semi-annual Monetary Policy Report" to the US Congress on Tuesday. Powell could provide a broad overview of the economy and monetary policy, with his prepared remarks being published ahead of his appearance on Capitol Hill.

On Friday, weaker employment data from the United States (US) sparked speculation that the Federal Reserve (Fed) might consider reducing interest rates in September. This continues providing support for non-yielding assets like Silver.

The CME's FedWatch Tool indicates that rate markets price in a 76.2% probability of a rate cut in September, up from 65.5% just a week earlier.

Furthermore, inflation figures from the United States are set to be released on Thursday. The US Core CPI is expected to maintain its year-over-year rate at 3.4% in June, with the monthly Core CPI likely remaining steady at 0.2%.

The safe-haven Silver could face challenges as market participants await progress in ceasefire negotiations in the Middle East. A potential ceasefire agreement in Gaza could alleviate risk sentiment and support the riskier assets.

However, according to the White House, significant differences remain between the parties involved, with Hamas expressing concerns over new Israeli actions in Gaza that could jeopardize the potential for an agreement.