Silver Price Forecast: XAG/USD rises above $30.50 as Russia warns of a strike on Ukraine

• Silver price extends its gains due to the rising Russia-Ukraine conflict.
• Russian President Vladimir Putin issued a warning about a potential nuclear-capable ballistic missile strike on Ukraine.
• The demand for the dollar-denominated Silver increases due to the subdued US Dollar.

Silver (XAG/USD) continues its upward trend for the second consecutive session, hovering around $30.70 during the Asian trading hours on Friday. This rally in Silver price is largely driven by escalating geopolitical tensions. Reports suggest that Russian President Vladimir Putin warned of a possible nuclear-capable ballistic missile strike on Ukraine, following Moscow's recent large-scale attacks on key energy infrastructure.

Meanwhile, a ceasefire between Israel and the Lebanese militant group Hezbollah was successfully maintained on Wednesday, thanks to a deal brokered by the United States and France. This truce has enabled residents to begin returning to their homes. However, Israel is still engaged in military operations against Hamas in the Gaza Strip.

Furthermore, the weakening of the US Dollar (USD) is making dollar-denominated Silver more affordable for buyers with foreign currencies, boosting its demand. Additionally, the US bond market has strengthened after US President-elect Donald Trump selected Wall Street veteran and fiscal conservative Scott Bessent as the US Treasury Secretary.

Markets are closely monitoring upcoming US data for further clues about the Federal Reserve's (Fed) monetary policy direction. On Wednesday, US core PCE prices for October met expectations, keeping investor hopes alive for another rate cut in December. However, other data indicated a resilient economy, suggesting that the Fed may take a cautious approach in the coming year.

According to the CME FedWatch Tool, futures traders are now pricing in a 66.5% probability of a 25 basis point rate cut in December, up from 55.9% a week ago. However, they expect the Fed to keep rates unchanged during its January and March meetings.