Silver Price Forecast: XAG/USD falls to near $49.50 due to fading Fed rate cut likelihood

• Silver price declines as Fed rate cut odds decrease following cautious Fedspeak.
• CME FedWatch Tool suggests pricing in a 43% chance of a 25-basis-point Fed rate cut in December.
• Fed Vice Chair Philip Jefferson emphasized that the Fed should move "slowly" on any further rate cuts.

Silver price (XAG/USD) continues its losing streak for the fourth successive session, trading around $49.50 per troy ounce during the Asian hours on Tuesday. The non-interest-bearing Silver struggles amid declining US Federal Reserve (Fed) rate cut bets for December. Traders will closely monitor Thursday's September jobs report for signals on US economic health, while Wednesday's release of the Fed's meeting minutes is expected to offer further rate guidance.

The CME FedWatch Tool suggests that financial markets are now pricing in a 43% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 62% probability that markets priced a week ago.

Federal Reserve Vice Chair Philip Jefferson noted Monday that risks to the labor market now outweigh upside risks to inflation, while stressing that the Fed should proceed "slowly" with any additional rate reductions. However, Fed Governor Christopher Waller said that the US central bank should cut the interest rates when policymakers meet in December. Waller added that he's grown concerned over the labor market and the sharp slowdown in hiring.

The downside of the precious metal could be restrained supply concerns, particularly as the prospect of US tariffs looms. The US Department of the Interior last week designated Silver, Copper, and metallurgical Coal as "critical minerals," citing their strategic economic and national security roles. The classification also clears the path for potential Section 232 probes and related trade measures, mirroring earlier actions taken on Copper.