According to the CME FedWatch Tool, markets now see a reduced probability of a September cut, with only gradual 25-basis-point reductions anticipated later this year. A firmer greenback has weighed heavily on non-yielding bullion, reducing its appeal against interest-bearing assets.
Geopolitical Tensions and Safe-Haven Demand
Silver mirrored gold’s weakness, trading lower as fading expectations of rapid Fed cuts and easing geopolitical risk dented safe-haven flows. Diplomatic momentum surrounding negotiations to end the conflict in Eastern Europe has lessened the urgency for investors to hold protective assets.
“Any sign of progress in peace talks typically shifts capital away from gold and silver toward riskier assets,” said a London-based metals strategist.
Although sporadic military activity continues, the prospect of structured negotiations has been enough to curb demand for safe-haven exposure in the near term.
Markets Eye Fed Minutes and Powell Speech
Attention now turns to the release of the Federal Reserve’s July policy meeting minutes and Chair Jerome Powell’s speech at the Jackson Hole Symposium. Investors are seeking clarity on the central bank’s inflation outlook and potential pace of monetary easing.
Powell’s remarks carry added weight as political pressure intensifies; former U.S. President Donald Trump recently criticized the Fed for delaying cuts, warning of potential fallout in the housing market.