XAG/USD rises above $60.00 amid less hawkish Fed tone

• Silver rises as Fed Chair Kevin Warsh’s surprisingly less hawkish comments reduce the urgency for immediate interest rate hikes.
• Plunging oil prices and easing supply anxieties via the Strait of Hormuz further boosted Silver.
• Soft US economic data further cooled hawkish Fed sentiment, reducing expectations for aggressive future interest rate hikes.

XAG/USD gains ground for the third consecutive day, trading around $60.20 per troy ounce during the Asian hours on Thursday. Silver prices find support following a less hawkish tone than expected from Federal Reserve (Fed) Chairman Kevin Warsh at Wednesday’s ECB Forum on Central Banking.

Fed Chair Warsh noted that while inflation remains too elevated, reiterating the Fed’s firm commitment to its 2% target and institutional independence, eased inflation expectations over the past month suggest there is no immediate urgency to raise interest rates. Notably, he refrained from giving explicit guidance for the upcoming July policy decision, leaving markets to weigh the central bank’s next move.

Meanwhile, a sharp downturn in the global energy market further boosted the precious metal. Crude oil benchmarks slid significantly as supply anxieties and inflation fears eased, driven primarily by a rapid recovery in maritime traffic through the Strait of Hormuz. This positive momentum was amplified by notable breakthroughs in indirect diplomatic talks between Washington and Tehran, lowering geopolitical risk premiums across commodities.

A batch of soft US economic data further cooled the hawkish sentiment surrounding the Fed outlook. June’s ADP Employment Change report showed that private payrolls grew by just 98K, missing Wall Street’s 113K forecast and slowing from May’s 122K increase. Additionally, the manufacturing sector showed signs of cooling as the ISM Manufacturing PMI edged lower to 53.3, missing the 54.0 consensus estimate. Together, this cooling data and diplomatic progress have investors shifting their full attention to the upcoming Nonfarm Payrolls report for fresh insights into the labor market and the Fed’s policy path.