Silver Price Analysis: XAG/USD continues post-Fed rally as traders mull ongoing Russo-Ukraine uncertainty

• Strong US data failed to impact markets and silver continues to trade on the front foot in the $25.40 area.
• That marks a more than 3.5% rebound from this week’s pre-Fed lows in near $24.50.
• Amid continued Russ0-Ukraine uncertainty, it’s not surprising that XAG/USD trades near the middle of its post-invasion $24.00ish to $27.00ish range.

The latest batch of US data, including a stronger than anticipated weekly jobless claims report that suggests labour market turnover remains well within bounds considered “healthy” plus a better-than-expected Philadelphia Fed Manufacturing survey which pointed to an uptick in inflationary pressures in March, has broadly failed to impact the market mood. While the data very much reinforces the hawkish message imparted by Fed Chair Jerome Powell on Wednesday after the Fed lifted rates for the first time in three years, but has not impacted spot silver (XAG/USD) prices, which are trading with a positive bias and looking to challenge $25.50.

At current levels around $25.40, XAG/USD is trading higher by over 1.0% on the day and more than 3.5% up versus Wednesday’s pre-Fed lows in the $24.40s. Facilitating the rebound has been a weakening post-Fed US dollar and a sharp recovery in energy costs (the Bloomberg Energy Index is up over 6.0% on the day), which is keeping demand for inflation-protection (in the form of precious metals) strong. Risk appetite is mixed on Thursday as investors attempt to struggle to keep on top of Russo-Ukraine developments, particularly regarding peace talks.

While Russia and Ukraine both denied a much-circulated FT article on Wednesday that claimed the two sides were near to an agreement on a 15-point peace plan, investors are clinging on to hopes that a deal can be struck to put a swift end to the violence. This is likely to keep a cap on silver’s potential gains for now. Indeed, amid the high degree of uncertainty regarding how events will turn out between Russia and Ukraine, it's perhaps not surprising to see silver trading near the middle of its post-invasion $24.00ish lows and $27.00ish highs.