Silver Price Forecast: XAG/USD advances to near $31.50 due to safe-haven flows

• Silver price receives support from safe-haven flows amid rising Middle-East conflict.
• Israel has announced a "limited" ground operation targeting Hezbollah positions in the southern Lebanon border region.
• Fed Chair Powell indicated that any forthcoming rate cuts are expected to be modest, reducing the appeal of non-yielding Silver.

Silver price (XAG/USD) snaps its two-day losing streak, trading around $31.40 per troy ounce during Tuesday's European session. Silver prices receive support from safe-haven flows amid rising geopolitical tensions in the Middle East.

Israel has announced a "limited" ground operation targeting Hezbollah positions in the southern Lebanon border region, with troops crossing into the area, according to local news agency Al Jazeera. In addition, Israeli warplanes launched extensive airstrikes on southern Beirut after civilians were instructed to evacuate. On Monday, Israeli attacks in Lebanon resulted in the deaths of at least 95 people.

However, the prices of Silver received downward pressure following the recent remarks from the Federal Reserve (Fed) Chairman Jerome Powell. Powell said the central bank is not in a hurry and will lower its benchmark rate 'over time.' He added that the recent 50 basis point interest rate cut should not be seen as an indication of similarly aggressive future actions, noting that upcoming rate changes are likely to be more modest. Prolonged higher interest rates make non-yielding Silver less appealing to investors seeking more attractive alternatives.

Silver prices have been under pressure due to weaker-than-expected demand growth in China, exacerbated by data showing a decline in manufacturing activity. On Monday, China's Caixin Manufacturing Purchasing Managers' Index (PMI) fell to 49.3 in September, indicating a contraction, down from 50.4 in August. Given China's position as one of the world's largest manufacturing hubs, the country's industrial demand for Silver is substantial, making these demand concerns particularly impactful.