Silver Price Forecast: XAG/USD breaks below $30.50 due to a quest for a ceasefire in Gaza

• Silver prices depreciate due to increased optimism following renewed efforts to secure a ceasefire deal in Gaza.
• Mediators from Egypt and Qatar have conveyed Hamas's response to a proposal involving the release of hostages held in Gaza.
• XAG/USD may limit its downside as the US Dollar may struggle due to rising expectations of the Fed reducing rates in 2024.

Silver price (XAG/USD) halts its five-day winning streak, trading around $30.40 per troy ounce during the European session on Thursday. The decline in the safe-haven metal's price is attributed to increased optimism following signs of renewed efforts to secure a ceasefire deal between Israel and Hamas, as reported by Reuters.

Mediators Egypt and Qatar delivered a response from Hamas to a proposal that includes the release of hostages held in Gaza and a ceasefire in the Palestinian enclave. Israel is currently studying the document, according to a statement released by Prime Minister Benjamin Netanyahu's office on behalf of the Mossad spy agency.

The XAG/USD pair may limit its downside as the US Dollar (USD) may struggle due to the softer US data raising speculations of the Federal Reserve (Fed) reducing interest rates in 2024. US ISM Services PMI fell sharply to 48.8 in June, marking the steepest decline since April 2020. This figure was well below market expectations of 52.5, following a reading of 53.8 in May.

Additionally, the ADP Employment report showed that US private businesses added 150,000 workers to their payrolls in June, the lowest increase in five months. This figure fell short of the expected 160,000 and was below the downwardly revised 157,000 in May.

On Tuesday, Powell said that the Fed is getting back on the disinflationary path. However, Powell wants to see further evidence before cutting interest rates as the US economy and the labor market remain strong, per Reuters.