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February 1st - On January 31st, House Democratic Leader Hakim Jeffries stated that they would not help Republicans pass a federal government funding bill through a fast-track process. US media pointed out that Jeffries statement suggests the US government shutdown may last longer than expected. The US Senate passed a funding bill for several federal departments for the remainder of the fiscal year on January 30th, and the bill will be sent to the House for consideration. However, the House is currently in recess and may vote on the funding bill as early as February 2nd. It is reported that the operating funds for several federal departments, including the State Department and the Pentagon, were exhausted on January 30th, thus the US federal government entered a partial shutdown starting at midnight on January 31st.On February 1st, India raised taxes on some stock transactions in an effort to further curb speculative trading by retail investors. According to the budget submitted to Parliament on Sunday, the Indian government increased the securities transaction tax on stock index futures from 0.02% to 0.05%. The tax rate on option premiums and option exercise also increased from 0.1% to 0.15%. This news triggered a sharp drop in the stock market, with Indias main index, the NIFTY 50, falling nearly 3% intraday. Shares of the Bombay Stock Exchange (BSE), Indias second-largest stock exchange, and brokerage stocks, including AngleOne, all fell sharply. This move signifies Indias determination to curb speculative trading. The influx of retail traders had previously made India the worlds largest market for such products by contract trading volume. Regulators had introduced several restrictions by the end of 2024, including limiting the number of index option contracts per exchange to one per week.Tencent Yuanbao App has risen to the number one free app on the Apple App Store, after announcing the launch of a 1 billion yuan cash bonus campaign.February 1st - US President Trump stated on January 31st that India will import oil from Venezuela, not Iran. He also claimed that the US welcomes the agreement reached between China and the US to import Venezuelan oil. According to Reuters, Trump made these remarks aboard Air Force One, en route from Washington D.C. to Florida. He said the US and India had finalized an agreement, "at least in principle."February 1st - On February 1st local time, Iranian Parliament Speaker Mohammad Ghalibaf issued a stern statement at an open parliamentary session, announcing reciprocal countermeasures against recent European designations of the Iranian Islamic Revolutionary Guard Corps (IRGC). Ghalibaf declared that Iran officially designates the armed forces of European countries as "terrorist organizations." Ghalibaf emphasized that the EU will bear full responsibility for all legal and practical consequences arising from this designation, including the risk of security confrontation within the region.

Forecast for Silver Price: XAG/USD pares substantial weekly gains below $22.00 amid conflicting sentiment

Daniel Rogers

Mar 17, 2023 13:47

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Silver price (XAG/USD) recovers from the intraday low to $21.80 on a sluggish Friday as metal traders take a respite following a volatile week amid a light calendar and conflicting sentiments. Nevertheless, the XAG/USD appears poised for its largest weekly gain since the week beginning November 28.

 

The efforts of global policymakers to allay concerns of the 2008 financial market crisis were met with little enthusiasm, but they were successful in preventing further market losses, so traders remain cautiously optimistic. Nonetheless, contradictory US data and hawkish Fed wagers challenge the optimists.

 

Ammar Al Khudairy, the chairman of the Saudi National Bank, stated that Credit Suisse's conditions were "sound," joining the efforts of the major US banks to assist the California-based First Republic Bank in avoiding a liquidity crisis and bolstering the risk-on disposition. Credit Suisse plans to borrow up to 50 billion Swiss francs (CHF) from the Swiss National Bank (SNB) to bolster liquidity, and Reuters cites anonymous sources as saying that US institutions are less susceptible to the Credit Suisse scandal. Moreover, US Treasury Secretary Janet Yellen's assurances regarding the health of the US banking industry and the European Central Bank's (ECB) 50 basis point (bps) rate hike, which was in line with market expectations, also boosted sentiment and enabled the most recent increase in XAG/USD prices.

 

However, Weekly Initial Jobless Claims decreased to 192K for the week ending March 10 compared to 205K expected and 212K previously, while the four-week moving average decreased to 196.5K from 197.25K previously. (revised). In addition, Housing Starts increased to 1.45 million in February from 1.32 million in January and 1.31 million predicted by economists. During the same month, Housing Starts increased to 1.524 million from 1.34 million anticipated and 1.339 million previously. In addition, the Philadelphia Fed Manufacturing Survey indicator came in at -23.2, compared to the expected -14.5 and the prior reading of -24.3.

 

It should be noted that the most recent decline in US inflation expectations, as indicated by the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data, also benefits the Silver price by exerting downward pressure on the US Dollar.

 

Ten-year and two-year US Treasury bond yields display a lack of direction while reflecting market sentiment, as yesterday's rebound fails to supplant the two-week downtrend. However, Wall Street ended the day in the black with benchmark indices gaining more than 1.0%, while S&P 500 Futures posted slight losses.

 

Bloomberg's dissemination of news articles indicating China's sustained economic recovery also challenges Silver Bears.

 

Traders in metals should keep a watch on the Federal Open Market Committee (FOMC) monetary policy meeting next week. Prior to that, initial readings of the US Michigan Consumer Sentiment Index for March and the UoM 5-year Consumer Inflation Expectations for the aforementioned month will be crucial for establishing distinct directions.


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