Silver Drops as Strong US PMI Bolsters Hawkish Fed Outlook
Silver prices fell on Monday after a robust US manufacturing report reinforced expectations that the Federal Reserve will keep monetary policy restrictive. XAG/USD traded around $57.20, down 0.73% on the day.
The latest US manufacturing data surprised to the upside, with the ISM PMI indicating expansion. The reading reinforced market bets that the Federal Reserve will keep interest rates higher for longer to combat inflation.
The prospect of a tighter monetary policy pressured precious metals, with silver (XAG/USD) falling 0.73% to around $57.20. Higher rates tend to increase the opportunity cost of holding non-yielding assets like silver.
Investors now await further economic cues and Fed commentary to gauge the next moves for the dollar and commodities.
Source: FXStreet Forex News